Yum Brands, which owns the Taco Bell, Pizza Hut, and KFC chains, reported better-than-expected earnings than Wall Street analysts had expected.
The mass closure of fast-food restaurants in 2020 was bound to impact Yum Brands' earnings. The company quickly adjusted, focusing on grocery delivery. As a result, it was able to weather the crisis relatively easily.
We now know that Yum Brands' revenue for the last fiscal quarter was even slightly higher than expected - $1.74 billion versus the forecasted $1.72 billion. Net income was $332 million, or $1.08 per share. That's still below the $488 million, or $1.58 per share, reported a year earlier.
Only Taco Bell saw an increase in sales, up 1 percent for the quarter. Most of the brand's restaurants are in the U.S., where fast-food chains have recovered quickly. The decline in sales in other countries has not been incredibly impactful on the brand.
But the KFC chain, with locations around the world (only 18% of the network accounts for the domestic market), failed to show growth. As a result, while in the U.S. there was noted sales growth of 8%, worldwide there was a decline of 4%.
In Pizza Hut, which has historically been perceived as more of a takeaway company, sales fell only 1%. And this happened again because the network's restaurants are located in many countries around the world (in the home market, by contrast, there was an increase of 8%).
The only Yum Brands brand that failed to show growth even in the U.S. is the Habit Burger Grill chain acquired last year. However, given that this burger chain is relatively small compared to others in the industry, this had little impact on its bottom line.
Yum also reported it opened 227 new restaurants during the quarter. In doing so, Pizza Hut was the only brand in the company that closed more stores than it opened. Some of the difficulty in opening new restaurants is reportedly due to the difficulty obtaining building permits during the pandemic.
The company declined to provide a forecast for the fiscal year 2021, citing uncertainty caused by the crisis.
Photo credit: depositphotos.com.