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Slow Pizza Hut sales in the U.S. weigh on Yum Brands’ revenue

Sign for the food brand Pizza Hut on 30th May 2022 in Birmingham, United Kingdom. (photo by Mike Kemp/In Pictures via Getty Images)

Mike Kemp | In Pictures | Getty Images

Yum Brands on Wednesday reported quarterly revenue that fell short of analysts’ expectations, hurt by weak same-store sales growth at Pizza Hut.

Shares of the company fell more than 1% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.44 adjusted vs. $1.28 expected
  • Revenue: $1.71 billion vs. $1.77 billion expected

The restaurant company reported third-quarter net income of $416 million, or $1.46 per share, up from $331 million, or $1.14 per share, a year earlier.

Excluding items, Yum earned $1.44 per share.

Net sales rose 4% to $1.71 billion. The company set a new record for digital sales growth, Yum CEO David Gibbs said in a statement.

Yum’s same-store sales grew 6% in the quarter, helped by strong sales at Taco Bell’s U.S. locations and KFC’s international restaurants.

KFC’s overall same-store sales increased 6% in the quarter, beating StreetAccount estimates of 5.6%. The fried chicken chain’s international division reported same-store sales growth of 7%, boosted by strong growth in China, its largest market.

But in the U.S., its second-largest market, KFC saw flat same-store sales growth. The chain has struggled in its home country recently. It has lost market share to chicken leader Chick-fil-A and Restaurant Brands International’s Popeyes, which recently overtook KFC as the number-two chicken chain in the U.S.

Taco Bell reported same-store sales growth of 8%, topping StreetAccount estimates of 6.3%. The chain’s strong sales came largely from its U.S. restaurants. Its expanding international division reported same-store sales growth of 1%.

Pizza Hut’s same-store sales rose just 1%, falling short of StreetAccount estimates of 1.7%. The pizza chain reported 2% same-store sales growth for international restaurants and flat same-store sales in the U.S.

Pizza Hut isn’t the only pizza chain that has struggled to win over U.S. consumers. Rival Domino’s Pizza reported a 0.6% drop in same-store sales during its third quarter.

Yum’s total restaurant footprint grew 6% as it opened more than 1,100 locations during the quarter.