Yum Earnings Beat Forecasts - Same-Store Sales Lag

Yum, the owner of KFC and Taco Bell, reported stronger-than-expected second-quarter profit, although same-store sales lagged.
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Yum Brands  (YUM) - Get Report, the owner of KFC, Pizza Hut, and Taco Bell, reported stronger-than-expected second-quarter profit, although same-store sales lagged.

The Louisville, Ky., restaurant owner reported net income dropped to $206 million, or 67 cents a share, from $289 million, or 92 cents, in the year-earlier quarter.

Analysts surveyed by FactSet predicted earnings per share of 55 cents for the latest quarter.

Revenue fell 9% to $1.2 billion from $1.31 billion last year. The latest figure beat analysts’ projection of $1.18 billion.

Same-store sales dropped 15% in the second quarter, compared with the FactSet analyst consensus call for a 14.1% slide. The coronavirus pandemic caused the decline as restaurants were largely closed.

Digital purchases helped boost the quarter's total, and sales got better later in the quarter as restaurants reopened.

“While second-quarter results were meaningfully impacted by covid-19, I couldn’t be prouder of how our brands adapted with remarkable agility, leveraging consumer insights and digitally enabled off-premise capabilities,” Chief Executive David Gibbs said in a statement.

Digital sales reached a record $3.5 billion for the quarter, an increase of more than $1 billion over the prior year.

Some 95% of Yum’s global restaurants are now at least partly open. 

“Same-store-sales trends for open stores stabilized in June just a few points short of flat, despite the majority of our dining rooms still remaining closed, and these trends have continued into July,” Gibbs said.

Yum shares recently traded at $91.90, down 3.1%. The shares have dipped 9% this year through Wednesday's close, and 21% since they touched a 52-week high below $120 almost exactly a year ago. They've recouped almost 73% from their 52-week low below $55, set in late March.