Yum Brands posted 3% growth in same-store sales for Q4, topping analysts' expectations of 2.74%, according to LSEG. The result was driven by the success of low-priced menus, notably at Taco Bell in the US, as well as KFC's strong international performance. With consumers' purchasing power under pressure, the group has captured rising demand for budget-friendly meals, despite price increases in recent years to offset inflation.
Taco Bell, which represents 36% of Yum Brands' operating profit, saw its US comparable sales rise 7%, supported by popular items and combo meals priced between $5 and $11.99. KFC also grew 3% globally, benefiting from network expansion and the growing popularity of chicken as a less expensive alternative to beef. However, Pizza Hut fell 5% over the year in the United States, marking a ninth consecutive quarter of decline and prompting the group to consider new strategic directions for the brand.
Note that adjusted earnings per share came in at $1.73, slightly below the $1.77 expected. Even so, the commercial performance confirms the effectiveness of a value-focused strategy shared by several major fast-food chains. In an uncertain economic environment, Yum Brands appears to have found a balance between price competitiveness and profitability.
