Yum Brands reported an unexpected decline in global same-store sales on Tuesday, largely due to sluggish demand at its KFC outlets in the U.S. and inconsistent international sales. KFC’s U.S. same-store sales dropped 7%, marking the third consecutive quarter of decline. Despite introducing $5 value items in August, such as an eight-piece chicken nugget pack and a nugget meal bowl under its “Taste of KFC” menu, the brand continues to face challenges amidst fast-food “value wars” from competitors like McDonald’s and Burger King. Many customers have been drawn to deals and discounts, seeking ways to offset high menu prices.
On a brighter note, Taco Bell’s U.S. same-store sales rose 4%, marking the chain’s 11th straight quarter of growth. However, Yum’s global comparable sales fell 2%, missing market expectations of a 0.23% increase, according to LSEG data. Yum’s shares dipped about 1% in premarket trading but have risen 1.6% overall this year.
In global markets, Yum also faced challenges with its Pizza Hut brand due to boycotts stemming from the Israel-Gaza conflict, impacting sales beyond the Middle East to markets like Malaysia and Indonesia. Meanwhile, Restaurant Brands International, Burger King’s parent, also reported disappointing revenue, and McDonald’s recently saw its largest quarterly global sales decline in four years.
Yum reported third-quarter earnings of $1.37 per share, slightly below analysts’ expectations of $1.41 per share.
