What's Going On With KFC-Parent Yum! Brands Stock Today?

Yum! Brands Inc YUM reported fourth-quarter fiscal 2023 sales growth of 1% year-on-year to $2.04 billion, missing the analyst consensus estimate of $2.11 billion.

Worldwide system sales grew 5% excluding foreign currency translation, with KFC at 7%, Taco Bell at 6%, and Pizza Hut at 1%.

Same-store sales for the quarter grew 1%. Same-store sales at KFC Division increased 2%, Taco Bell climbed 3%, and Pizza Hut slid 2%.

YUM’s Company sales increased 4% Y/Y to $647 million, and Franchise and property revenues gained 1% to $896 million. Total costs and expenses increased by 1% Y/Y to $1.43 billion.

Adjusted EPS was $1.26, below the consensus of $1.40.

YUM opened 1,853 gross units during the quarter. Restaurant-level margins were 17.4%, up 180 bps YoY.

During the quarter, the Company paid off a $325 million debt maturity with no further significant debt maturities in 2024 or 2025. The net leverage ratio ended the quarter at 4.2x.

The operating margin expanded by 128 bps to 29.9%, and operating income for the quarter climbed 5.4% to $609 million.

YUM’s operating cash flow for the fiscal totaled $1.60 billion versus $1.43 billion last year. It held $724 million in cash and equivalents as of December 31, 2023.

The company stated that the recent purchase of 218 KFC outlets in the U.K. and Ireland is anticipated to negligibly affect its 2024 earnings per share, with the deal slated for completion in the second quarter.

“Looking to 2024, this will be a year of major milestones as we cross 30,000 restaurants at KFC, 20,000 at Pizza Hut, and well over 60,000 globally for Yum!,” commented David Gibbs, CEO of Yum! Brands.

Price Action: YUM shares are trading higher by 3.16% at $131.29 on the last check Wednesday.

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