KFC-Parent Yum Jumps as Tacos, Fried Chicken Keep Selling

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Investing.com — Shares of KFC-parent Yum! Brands (NYSE:YUM) traded 4% higher Wednesday after the restaurant chain beat fourth-quarter revenue estimates, driven strong demand for its tacos and fried chicken at its restaurants.

Total revenue increased nearly 9% to $1.9 billion as the pandemic-fueled consumption of fast food maintained its momentum. The company opened around 1,700 new restaurants in the quarter.

Quarterly same-store sales at KFC rose 5%, while those of Taco Bell were up 8%. Pizza Hut same-store sales rose 3%.

China was the lone market to see quarterly revenue fall from a year ago as the country ordered shutdowns in several cities amid measures aimed at containing the pandemic. Sales at both KFC and Pizza Hut fell in China, the biggest and the second biggest market for the two brands, respectively.

Yum has been experimenting with its menu, launching special menu items to keep fickle consumers interested. It has launched a crispy chicken sandwich taco at Taco Bell, a Detroit-style pizza at Pizza Hut and Beyond Meat’s plant-based faux chicken at KFC.

Taco Bell and KFC restaurants saw operating margins shrink, reflecting the industry-wide impact due to costlier inputs and higher costs of freight, packaging and labor. Pizza Hut’s operating margin expanded by just 0.5 percentage points, eroded by higher inflation. As a result, at $1.02 per share, Yum!’s earnings fell behind estimates. Total net costs and expenses increased 10% to almost $1.4 billion.