There are a lot of brands under the Yum Brands (NYSE:YUM) umbrella, including a panoply of familiar names from KFC to Taco Bell. In addition, Yum Brands turned in a terrific earnings report, which gave investors an appetite for a little more stock going into Wednesday’s trading session. Yum Brands posted wins all around.
Earnings came in at $1.31 against the $1.26 expected, while revenue handily beat projections as well, with $2.02 billion against the $1.92 billion expected. Even same-store sales managed to post wins, though this was a little more mixed. Overall, same-store sales were up 4%, but analysts expected a 4.4% increase. Taco Bell saw same-store sales jump 11% versus the expected 6.53%, while KFC gained 5% compared to the 4.84% expected. However, Pizza Hut only increased 1% against an expected 1.73%, and Habit Burger Grill lost 1% against an expected gain of 0.86%.
Yum Brands saw gains in several segments, but one of its biggest issues was in China. With China’s Zero-COVID policy only recently relaxed, sales for the fast food giant suffered in the region. However, with the combination of higher-income patrons settling for fast food, and current fast food customers switching to value meals, Yum Brands benefited from both ends of the trend. Gains in Abu Dhabi after a franchisee went public likely helped as well.
Overall, analyst consensus calls Yum Brands a Moderate Buy. Thanks to an average price target of $142.57 per share, Yum Brands stock also comes with an upside potential of 9.26%.