Core Viewpoint - The IRS has assessed $4 billion in taxes, penalties, and interest on Yum! Brands due to a tax-deferred reorganization in 2014, leading the company to sue the IRS to prevent collection of these funds [1][9][11]. Company Overview - Yum! Brands is the parent company of KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill, having spun off from PepsiCo in 1997, and is one of the largest restaurant chains globally with over 61,000 locations in 155 countries [2][3]. Tax-Related Developments - Yum! Brands announced a relocation of its headquarters from Louisville, Kentucky to Plano, Texas, primarily due to tax considerations, as Texas has a 0% corporate income tax rate compared to Kentucky's 5% [4]. - The company has a history of tax-related issues, including the current dispute with the IRS regarding a 2014 reorganization [4][10]. 2014 Reorganization Details - In 2014, Yum! Brands underwent a corporate reorganization to focus on brand-based divisions rather than geographic ones, aiming to drive growth [5]. - The reorganization involved issuing stock in exchange for stock in previous subsidiaries, which Yum! Brands believed qualified for tax deferral under Internal Revenue Code Section 368(a)(1)(B) [6][8]. IRS Dispute - The IRS claims Yum! Brands owes $2.1 billion in taxes, $418 million in penalties, and over $1.5 billion in interest, totaling over $4 billion, which is significant compared to the company's 2024 pre-tax income of $1.9 billion and income tax payment of $414 million [9][10]. - Yum! Brands has contested the IRS's position, asserting that it met all requirements for tax deferral, but has faced unsuccessful appeals in court [10][11].

Plus – New Mountain Dew® Sweet Lightning® Peaches & Cream "Dirty" Soda Speeds into SummerLOUISVILLE, Ky., June 5, 2025 /PRNewswire/ -- KFC® is kicking off summer with a full-throttle menu, bringing back its iconic meal deal, Fill Ups, in partnership with F1® THE MOVIE—making KFC drive-thrus the most desired pit stop of summer. The fan-favorite Fill Ups return nationwide with KFC's signature finger lickin' good flavor, in four crave-worthy combos that deliver a bounty of food for an unbeatable value—a comple ...

The shares of Yum! Brands Inc (NYSE:YUM) are up 0.8% to trade at $145.07 at last glance while sporting an 8.7% year-to-date lead. Pressure at the 20-day moving average is keeping a lid on today's gains, while the $153 region has acted as a ceiling since the stock's April 4 bear gap of 8.4%. The shares are now trading within striking distance of a historically bullish trendline, however, which may help it close that bear gap.Per Schaeffer's Senior Quantitative Analyst Rocky White, the security is within one ...

It has been about a month since the last earnings report for Yum Brands (YUM) . Shares have lost about 3.1% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Yum due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Since Then?It turns out, ...

Financial Data and Key Metrics Changes - The company reported an 8% core operating profit growth over the last two years, maintaining this growth in Q1 [12][28] - The long-term growth algorithm aims for 5% unit growth annually, coupled with same-store sales growth translating to 7% system sales growth, targeting at least 8% core operating profit growth [31][32] Business Line Data and Key Metrics Changes - Taco Bell US significantly outperformed the US QSR industry in Q1, achieving a 9% same-store sales growth [62] - KFC International is the leading unit development engine, opening a new restaurant approximately every three hours [10][25] Market Data and Key Metrics Changes - The company operates in over 50 countries with a 98% franchise model, providing resilience in various macroeconomic environments [11][12] - Yum China continues to expand, serving only one-third of the Chinese population, indicating substantial growth potential [43][44] Company Strategy and Development Direction - The company is focused on transforming into a pure-play franchisor, emphasizing digital and technology capabilities through initiatives like Byte by Yum [12][21] - The strategic imperative includes leveraging scale across brands for procurement and supply chain efficiencies [58][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of KFC and Taco Bell, highlighting the resilience of the business model amid macroeconomic volatility [11][12] - The management acknowledged the challenges faced in international markets, particularly with Taco Bell in China, but remains optimistic about future growth [38][44] Other Important Information - The company has made significant investments in technology and digital capabilities, with over 40 AI projects underway [92][106] - The leadership team is seen as a critical factor in maintaining the brand's relevance and innovation [76][82] Q&A Session Summary Question: What is still underappreciated in the stock today? - Management believes the growth potential and the value of Byte technology are underappreciated by investors [24][27] Question: How sustainable is the 5% unit growth beyond 2025? - Management is confident in sustaining the 5% unit growth due to strong franchise capabilities and market opportunities [31][34] Question: How does the algorithm hinge on recovery in China? - While China has been a primary growth driver, there are still significant opportunities for unit growth globally [42][46] Question: How does the company view competition in the market? - The company is focused on outcompeting rivals and believes its franchising capabilities provide a competitive advantage [53][56] Question: What role does digital play in the company's strategy? - Digital initiatives, particularly Byte, are expected to enhance operational efficiency and improve franchisee economics [83][86] Question: How does the company balance investments in technology versus profitability? - Management aims to optimize resources while ensuring long-term growth through strategic investments in technology [96][97]

Core Points - Pizza Hut launches the BOOK IT! app as part of its revitalized summer reading program "BOOK IT! Summer of Stories," aimed at encouraging children's reading during summer months [1][2][4] - The program offers free Personal Pan Pizzas® to children who meet their reading goals, with the initiative running from June to August [3][4] - The BOOK IT! program has a long history, inspiring over 70 million children and distributing over 1.5 billion free pizzas since its inception in 1984 [9] Company Overview - Pizza Hut, a subsidiary of Yum! Brands, operates nearly 20,000 restaurants globally and is recognized for its innovative pizza offerings [5] - The company has a strong digital presence, with over half of its transactions coming from digital orders, and it continues to lead in technology within the food service industry [5] - Pizza Hut's commitment to community and environmental impact is reflected in its initiatives focused on equity, carbon reduction, and better packaging [5] Industry Context - The "Summer Slide" phenomenon refers to the decline in reading skills that children often experience during school breaks, with research indicating that students can lose the equivalent of two years of learning by middle school [2] - The BOOK IT! app aims to combat this issue by allowing parents to set personalized reading goals for their children, thereby enhancing literacy skills during the summer [2][4]

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Financial Performance - Total revenues for Q1 2025 reached $1,787 million, a 12% increase from $1,598 million in Q1 2024[8] - Net income for Q1 2025 was $253 million, down 19% from $314 million in Q1 2024[8] - Basic earnings per share for Q1 2025 were $0.91, compared to $1.11 in Q1 2024, reflecting a decrease of 18%[8] - Operating profit for Q1 2025 was $548 million, slightly up from $520 million in Q1 2024, indicating a 5% increase[8] - The company reported a comprehensive income of $275 million for Q1 2025, compared to $307 million in Q1 2024[10] - U.S. revenues for KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill Divisions totaled $1.0 billion in Q1 2025, up from $0.9 billion in Q1 2024, representing an increase of approximately 11.1%[54] - Company sales reached $607 million, up 28.1% from $474 million in the prior year quarter[8] - Consolidated operating profit for the quarter was $548 million, with income before income taxes reported at $429 million[52] Cash Flow and Assets - Cash provided by operating activities in Q1 2025 was $404 million, an increase from $363 million in Q1 2024[12] - Total assets as of March 31, 2025, were $6,659 million, a decrease from $6,727 million at the end of 2024[14] - Cash and cash equivalents as of March 31, 2025, totaled $607 million, down from $616 million at the end of 2024[40] - The total cash, cash equivalents, restricted cash, and restricted cash equivalents decreased to $782 million as of March 31, 2025, down from $807 million as of December 31, 2024, representing a decrease of about 3.1%[40] - Accounts and notes receivable, net decreased to $712 million from $775 million as of December 31, 2024[37] - Property, plant and equipment, net increased to $1,338 million from $1,304 million at the end of 2024[39] Shareholder Information - Shareholders' deficit increased to $7,804 million as of March 31, 2025, compared to $7,648 million at the end of 2024[14] - Dividends declared per common share increased to $0.71 in Q1 2025 from $0.67 in Q1 2024[8] - The company declared dividends of $199 million in Q1 2025, compared to $190 million in Q1 2024, representing a 4.7% increase[15] - The company repurchased 1,556 thousand shares of common stock for $228 million, with remaining capacity to repurchase up to $1.4 billion[33] Tax and Legal Matters - The effective tax rate for Q1 2025 was 41.0%, significantly higher than the 18.0% rate in Q1 2024[41] - The income tax provision for the quarter ended March 31, 2025, was $176 million, significantly higher than the $69 million recorded in the same quarter of 2024, indicating a year-over-year increase of approximately 155.2%[41] - The IRS has proposed an underpayment of tax amounting to $2.1 billion plus $418 million in penalties for the fiscal year 2014, with an estimated interest of approximately $1.5 billion through Q1 2025[72] - The company intends to contest the IRS's proposed tax adjustments vigorously and has filed a protest with the IRS Examination Division[73] - The company does not expect resolution of the IRS matter within twelve months and believes its tax position will be sustained[74] Acquisitions and Growth Strategy - The acquisition of 216 KFC restaurants in the U.K. and Ireland was completed for a purchase price of $177 million, enhancing KFC's growth strategy in the region[23][26] - The total identifiable net assets from the acquisition were valued at $89 million, with goodwill recognized at $88 million[27][29] - As of March 31, 2025, Yum! Brands operated over 60,000 restaurants in more than 155 countries, with 98% owned by franchisees[17] Capital Expenditures - Capital spending for Q1 2025 was $71 million, up from $49 million in Q1 2024[12] - Capital spending for the quarter was $71 million, with KFC and Taco Bell accounting for $18 million and $31 million, respectively[53] Debt and Financial Instruments - The company has a total long-term debt of $11.327 billion as of March 31, 2025, compared to $11.306 billion at the end of 2024, reflecting a marginal increase[58] - The company entered into new interest rate swaps in April 2025 to fix the interest rate on $1.5 billion of borrowings at a rate of 5.09% from April 2025 to March 2028[63] - The carrying value of the Term Loan A Facility was $500 million, with a fair value of $496 million as of March 31, 2025[69] - The carrying value of the YUM Senior Unsecured Notes was $4.550 billion, with a fair value of $4.395 billion as of March 31, 2025[69] Miscellaneous - The company recognized a foreign exchange net loss of $3 million in Q1 2025, compared to a gain of $5 million in Q1 2024[35] - The company is appealing a court decision regarding the utilization of tax losses in Mexico, with no expected resolution within twelve months[44] - The company incurred corporate and unallocated G&A expenses of $105 million for the quarter, which included charges related to resource optimization and brand headquarters consolidation[55] - The company recorded a net periodic benefit cost of $(1) million for its U.S. pension plans for the quarter ended March 31, 2025[57] - The company reported a loss of $20 million related to the sale of a 5% minority interest in Devyani International Limited during Q1 2024[60]

Yum Brands (YUM) reported $1.79 billion in revenue for the quarter ended March 2025, representing a year-over-year increase of 11.8%. EPS of $1.30 for the same period compares to $1.15 a year ago.The reported revenue represents a surprise of -2.76% over the Zacks Consensus Estimate of $1.84 billion. With the consensus EPS estimate being $1.29, the EPS surprise was +0.78%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ex ...

YUM! Brands, Inc. (YUM) reported first-quarter 2025 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.The company’s performance reflects solid contributions from the KFC and Taco Bell divisions. On the digital front, the company reported meaningful progress, with digital sales nearing $9 billion and accounting for 55% of total sales. Franchisee feedback on Yum!’s proprietary digital platform, Byte ...