Restaurant operator Yum! Brands (NYSE:YUM) witnessed robust sales gains across its major brands in the third quarter, with worldwide system sales rising by 10% and same-store sales increasing by 6%. EPS of $1.44 exceeded expectations by a wide margin of $0.17. Revenue of $1.7 billion came in lower than the anticipated mark of $1.77 billion.
During the quarter, the company opened over 1,100 gross new units, with digital sales now contributing over 45% to its top line. System sales experienced double-digit growth at KFC and Taco Bell, while Pizza Hut’s system sales increased by a modest 4%.
In the Habit Burger Grill division, system sales grew by 4%. The company’s KFC division clocked a total revenue of $700 million and saw 664 gross new restaurant openings. In the Taco Bell division, total revenue reached $629 million, with 74 gross new restaurant openings. The Pizza Hut division delivered a total revenue of $242 million and opened 383 gross new restaurants.
What Is the Price Forecast for YUM Stock?
Overall, the Street has a Moderate Buy consensus rating on Yum! Brands. The average YUM price target of $139.40 implies a 15.3% potential upside.
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