Core Insights - Yum Brands reported quarterly earnings and revenue that fell short of analysts' expectations, primarily due to declines in same-store sales for Pizza Hut and KFC in the U.S. [1] Financial Performance - The company reported a second-quarter net income of $374 million, or $1.33 per share, an increase from $367 million, or $1.28 per share, a year earlier [1] - Adjusted earnings per share were $1.44, slightly below the expected $1.46 [3] - Net sales increased by 10% to $1.93 billion, but this was below the expected $1.94 billion [2][3]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section summarizes Yum! Brands' strong second-quarter 2025 performance, strategic announcements, and CEO commentary [Second-Quarter Performance Overview](index=1&type=section&id=Second-Quarter%20Performance%20Overview) Yum! Brands reported strong Q2 2025 results with GAAP EPS of $1.33 and EPS excluding Special Items of $1.44, a 7% increase year-over-year, while digital system sales exceeded $9 billion, achieving a record 57% digital sales mix, and worldwide system sales grew 4% excluding foreign currency translation, led by Taco Bell at 6% and KFC at 5% Second-Quarter 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | % Change | | :-------------------------- | :------ | :------ | :------- | | GAAP EPS | $1.33 | $1.28 | +4 | | EPS Excluding Special Items | $1.44 | $1.35 | +7 | | Worldwide System Sales (Ex F/X) | +4% | N/A | N/A | | Worldwide Same-Store Sales | +2% | N/A | N/A | | Worldwide Units | +3% | N/A | N/A | | GAAP Operating Profit | +2% | N/A | N/A | - Digital system sales exceeded **$9 billion**, with a record digital mix of approximately **57%**[7](index=7&type=chunk)[8](index=8&type=chunk) - Unit count increased **3%** including **871** gross new units in the quarter[8](index=8&type=chunk) [CEO Commentary](index=1&type=section&id=DAVID%20GIBBS%20COMMENTS) CEO David Gibbs highlighted the strength of Q2 results, attributing them to bold food innovation, digital transformation, and iconic brands, noting Taco Bell U.S. outperforming with 4% same-store sales growth and KFC International opening 565 new units, while expressing confidence in Yum!'s future and announcing Chris Turner as his successor, effective October 1, 2025 - Taco Bell U.S. meaningfully outpaced the category with **4%** same-store sales growth[3](index=3&type=chunk) - KFC International opened **565** gross new units[3](index=3&type=chunk) - Chris Turner, current CFO and Chief Franchise Officer, will succeed David Gibbs as Chief Executive Officer, effective **October 1, 2025**[3](index=3&type=chunk)[8](index=8&type=chunk) [Recent Strategic Announcements](index=1&type=section&id=RECENT%20STRATEGIC%20ANNOUNCEMENTS) Key strategic announcements include the upcoming CEO transition to Chris Turner, who has been pivotal in digital and technology transformation, and Taco Bell's plan to expand its innovative Live Más Café concept to 30 locations by the end of 2025, targeting $5 billion in beverage sales by 2030 - Chris Turner, CFO since 2019 and Chief Franchise Officer since 2024, was unanimously elected to succeed David Gibbs as CEO, effective **October 1, 2025**, having been instrumental in transforming the digital and technology organization, launching Byte by Yum!, and centralizing the global supply chain[8](index=8&type=chunk) - Taco Bell announced plans to scale its Live Más Café concept to **30** locations by the end of **2025**, as part of a long-term strategy to reach **$5 billion** in beverage sales by **2030**[8](index=8&type=chunk) [Divisional Performance](index=3&type=section&id=Divisional%20Performance) This section details the second-quarter 2025 performance of Yum! Brands' key divisions: KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill [KFC Division](index=3&type=section&id=KFC%20DIVISION) The KFC Division reported a 5% increase in restaurants and 5% system sales growth (excluding F/X) for Q2 2025, with same-store sales growing 2%, while operating profit increased 9% (8% excluding F/X), with international markets showing strong growth and the U.S. market experiencing a decline KFC Division Second-Quarter 2025 Performance | Metric | 2025 | 2024 | % Change (Reported) | % Change (Ex F/X) | | :-------------------------- | :----- | :----- | :------------------ | :---------------- | | Restaurants | 32,369 | 30,689 | +5 | N/A | | System Sales ($MM) | 8,721 | 8,226 | +6 | +5 | | Same-Store Sales Growth (%) | +2 | (3) | NM | NM | | Operating Profit ($MM) | 365 | 334 | +9 | +8 | | Operating Margin (%) | 43.0 | 46.6 | (3.6) ppts | (3.3) ppts | KFC Division System Sales Growth Ex F/X by Region (Q2 2025) | Region | System Sales Growth Ex F/X (% Change) | | :-------------------------------- | :------------------------------------ | | International | +7 | | U.S. | (8) | | Asia | +10 | | Latin America | +10 | | Middle East / Turkey / North Africa | +10 | | Africa | +11 | - KFC Division opened **566** gross new restaurants across **58** countries[9](index=9&type=chunk) [Taco Bell Division](index=4&type=section&id=TACO%20BELL%20DIVISION) The Taco Bell Division demonstrated strong performance in Q2 2025, with a 2% increase in restaurants, 6% system sales growth (excluding F/X), and 4% same-store sales growth, while operating profit rose 5% (excluding F/X), with both U.S. and International markets contributing positively to system sales and same-store sales Taco Bell Division Second-Quarter 2025 Performance | Metric | 2025 | 2024 | % Change (Reported) | % Change (Ex F/X) | | :-------------------------- | :----- | :----- | :------------------ | :---------------- | | Restaurants | 8,756 | 8,565 | +2 | N/A | | System Sales ($MM) | 4,275 | 4,017 | +6 | +6 | | Same-Store Sales Growth (%) | +4 | +5 | NM | NM | | Operating Profit ($MM) | 262 | 250 | +5 | +5 | | Operating Margin (%) | 36.8 | 37.5 | (0.7) ppts | (0.7) ppts | - Taco Bell U.S. system sales grew **6%** and Taco Bell International system sales excluding foreign currency translation, grew **11%**[14](index=14&type=chunk) - Taco Bell U.S. and Taco Bell International same-store sales both grew **4%**[14](index=14&type=chunk) [Pizza Hut Division](index=4&type=section&id=PIZZA%20HUT%20DIVISION) The Pizza Hut Division faced challenges in Q2 2025, reporting a 1% decline in system sales (excluding F/X) and same-store sales, with operating profit decreasing significantly by 15% (excluding F/X), impacted by technology spending timing, franchise transitions, and global convention expenses Pizza Hut Division Second-Quarter 2025 Performance | Metric | 2025 | 2024 | % Change (Reported) | % Change (Ex F/X) | | :-------------------------- | :----- | :----- | :------------------ | :---------------- | | Restaurants | 19,768 | 19,864 | Even | N/A | | System Sales ($MM) | 3,116 | 3,140 | (1) | (1) | | Same-Store Sales Growth (%) | (1) | (3) | NM | NM | | Operating Profit ($MM) | 80 | 94 | (15) | (15) | | Operating Margin (%) | 33.5 | 39.3 | (5.8) ppts | (5.7) ppts | - Operating profit growth was negatively impacted by **3 percentage points** due to timing of technology spending, **2 percentage points** due to expense associated with three franchise entities transitioning to new ownership, and **2 percentage points** due to expenses associated with the bi-annual Global Franchise Convention[15](index=15&type=chunk) Pizza Hut Division System Sales Growth Ex F/X by Region (Q2 2025) | Region | System Sales Growth Ex F/X (% Change) | | :-------------------- | :------------------------------------ | | United States | (6) | | China | +1 | | Asia | +7 | | Middle East / Africa | +9 | [Habit Burger & Grill Division](index=5&type=section&id=HABIT%20BURGER%20%26%20GRILL%20DIVISION) The Habit Burger & Grill Division opened one new restaurant in Q2 2025, but experienced a 1% decline in system sales and a 4% decline in same-store sales - Habit Burger & Grill Division opened **1** gross new restaurant[18](index=18&type=chunk) - Habit Burger & Grill Division system sales declined **1%** with same-store sales declining **4%**[18](index=18&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) This section presents Yum! Brands' condensed consolidated income statements, balance sheets, and cash flow statements for the reported periods [Condensed Consolidated Summary of Results (Income Statement)](index=8&type=section&id=Condensed%20Consolidated%20Summary%20of%20Results) For Q2 2025, Yum! Brands reported a 10% increase in total revenues to $1,933 million, driven by strong company sales and franchise revenues, with operating profit growing 2% to $622 million and net income increasing 2% to $374 million, while year-to-date, total revenues rose 11%, but net income saw an 8% decrease Condensed Consolidated Summary of Results (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($MM) | Q2 2024 ($MM) | % Change | | :---------------------------------- | :------------ | :------------ | :------- | | Total revenues | 1,933 | 1,763 | 10 | | Company sales | 669 | 572 | 17 | | Franchise and property revenues | 835 | 789 | 6 | | Operating Profit | 622 | 607 | 2 | | Net Income | 374 | 367 | 2 | | Diluted EPS | $1.33 | $1.28 | 4 | Condensed Consolidated Summary of Results (YTD 2025 vs YTD 2024) | Metric | YTD 2025 ($MM) | YTD 2024 ($MM) | % Change | | :---------------------------------- | :------------- | :------------- | :------- | | Total revenues | 3,720 | 3,361 | 11 | | Company sales | 1,277 | 1,046 | 22 | | Franchise and property revenues | 1,620 | 1,546 | 5 | | Operating Profit | 1,170 | 1,127 | 4 | | Net Income | 628 | 681 | (8) | | Diluted EPS | $2.23 | $2.38 | (6) | [Condensed Consolidated Balance Sheets](index=12&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Yum! Brands' total assets increased to $6,917 million from $6,727 million at year-end 2024, primarily driven by increases in property, plant and equipment, goodwill, and intangible assets, while total liabilities rose to $14,597 million, largely due to a significant increase in short-term borrowings Condensed Consolidated Balance Sheets (As of June 30, 2025 vs December 31, 2024) | Metric | 6/30/25 ($MM) | 12/31/24 ($MM) | | :------------------------------------------ | :------------ | :------------ | | Total Assets | 6,917 | 6,727 | | Cash and cash equivalents | 677 | 616 | | Total Current Assets | 1,826 | 1,871 | | Property, plant and equipment, net | 1,383 | 1,304 | | Goodwill | 792 | 736 | | Intangible assets, net | 454 | 416 | | Total Liabilities | 14,597 | 14,375 | | Short-term borrowings | 971 | 27 | | Long-term debt | 10,418 | 11,306 | | Total Shareholders' Deficit | (7,680) | (7,648) | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the year-to-date period ended June 30, 2025, net cash provided by operating activities increased to $850 million from $705 million in the prior year, net cash used in investing activities decreased, while net cash used in financing activities significantly increased to $741 million, primarily due to higher share repurchases and dividends paid Condensed Consolidated Statements of Cash Flows (YTD 2025 vs YTD 2024) | Metric | YTD 2025 ($MM) | YTD 2024 ($MM) | | :------------------------------------------ | :------------- | :------------- | | Net Cash Provided by Operating Activities | 850 | 705 | | Net Cash Used in Investing Activities | (130) | (253) | | Net Cash Used in Financing Activities | (741) | (547) | | Repurchase shares of Common Stock | (338) | (50) | | Dividends paid on Common Stock | (395) | (377) | | Net Increase (Decrease) in Cash | 11 | (101) | [Non-GAAP Reconciliations & Segment Details](index=14&type=section&id=Non-GAAP%20Reconciliations%20%26%20Segment%20Details) This section provides reconciliations of non-GAAP financial measures to their GAAP equivalents and detailed segment-level financial results [Non-GAAP Measurements and Reconciliations](index=14&type=section&id=Reconciliation%20of%20Non-GAAP%20Measurements%20to%20GAAP%20Results) Yum! Brands provides non-GAAP measurements such as Core Operating Profit, EPS excluding Special Items, and Company restaurant profit to offer investors additional insights into the company's ongoing operational performance, as Special Items are not considered indicative of core business activities - Non-GAAP measurements are provided to facilitate the comparison of past and present operations and are not intended to replace GAAP results[45](index=45&type=chunk) - Special Items are not allocated to any segment and are excluded from segment performance assessment as they are not indicative of ongoing operations[46](index=46&type=chunk) - Company restaurant profit is used internally to evaluate the performance and profitability of company-owned restaurants[47](index=47&type=chunk) [Core Operating Profit Reconciliation](index=14&type=section&id=Core%20Operating%20Profit%20Reconciliation) Consolidated Core Operating Profit for Q2 2025 was $646 million, an increase from $633 million in Q2 2024, after adjusting for Special Items and the impact of foreign currency translation Core Operating Profit Reconciliation (Q2 & YTD 2025 vs 2024) | Metric | Q2 2025 ($MM) | Q2 2024 ($MM) | YTD 2025 ($MM) | YTD 2024 ($MM) | | :------------------------------------------------------- | :------------ | :------------ | :------------- | :------------- | | GAAP Operating Profit | 622 | 607 | 1,170 | 1,127 | | Special Items Expense - Operating Profit | 28 | 26 | 55 | 50 | | Negative (Positive) Foreign Currency Impact on Division Operating Profit | (4) | N/A | 7 | N/A | | Core Operating Profit | 646 | 633 | 1,232 | 1,177 | [Net Income and EPS Excluding Special Items Reconciliation](index=15&type=section&id=Net%20Income%20and%20EPS%20excluding%20Special%20Items%20Reconciliation) Diluted EPS excluding Special Items for Q2 2025 increased 7% year-over-year to $1.44, and for the year-to-date period, it increased 10% to $2.74, reflecting adjustments for various non-recurring items Diluted EPS Excluding Special Items Reconciliation (Q2 & YTD 2025 vs 2024) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------------------------- | :------ | :------ | :------- | :------- | | Diluted EPS | $1.33 | $1.28 | $2.23 | $2.38 | | Less Special Items Diluted EPS | (0.11) | (0.07) | (0.51) | (0.12) | | Diluted EPS excluding Special Items | $1.44 | $1.35 | $2.74 | $2.50 | Net Income Excluding Special Items Reconciliation (Q2 & YTD 2025 vs 2024) | Metric | Q2 2025 ($MM) | Q2 2024 ($MM) | YTD 2025 ($MM) | YTD 2024 ($MM) | | :---------------------------------- | :------------ | :------------ | :------------- | :------------- | | GAAP Net Income | 374 | 367 | 628 | 681 | | Special Items Expense - Operating Profit | 28 | 26 | 55 | 50 | | Special Items Tax Expense (Benefit) | 3 | (7) | 88 | (17) | | Net Income excluding Special Items | 405 | 386 | 771 | 714 | [Company Restaurant Profit Reconciliation](index=16&type=section&id=Reconciliation%20of%20GAAP%20Operating%20Profit%20to%20Company%20Restaurant%20Profit) Consolidated Company restaurant profit for Q2 2025 was $109 million on sales of $669 million, yielding a 16.3% margin, representing an increase in profit from Q2 2024, though the margin slightly decreased from 17.8%, with divisional margins varying and Pizza Hut showing a negative margin Consolidated Company Restaurant Profit and Margin (Q2 & YTD 2025 vs 2024) | Metric | Q2 2025 ($MM) | Q2 2024 ($MM) | YTD 2025 ($MM) | YTD 2024 ($MM) | | :---------------------------------- | :------------ | :------------ | :------------- | :------------- | | Company restaurant profit | 109 | 102 | 196 | 176 | | Company sales | 669 | 572 | 1,277 | 1,046 | | Company restaurant margin % | 16.3% | 17.8% | 15.3% | 16.8% | Divisional Company Restaurant Margin % (Q2 2025 vs 2024) | Division | Q2 2025 Margin % | Q2 2024 Margin % | | :-------------------- | :--------------- | :--------------- | | KFC Division | 12.1% | 11.9% | | Taco Bell Division | 24.3% | 25.6% | | Pizza Hut Division | (6.6)% | (2.2)% | | Habit Burger & Grill Division | 10.7% | 10.7% | [Segment Results (Detailed)](index=18&type=section&id=Segment%20Results) These tables provide a detailed breakdown of revenues and expenses for each of Yum! Brands' divisions (KFC, Taco Bell, Pizza Hut, Habit Burger & Grill) and Corporate and Unallocated, reconciling them to the consolidated summary of results, with the Corporate and Unallocated column including all Special Items Q2 2025 Total Revenues by Segment ($MM) | Segment | Total Revenues ($MM) | | :-------------------- | :------------- | | KFC Division | 849 | | Taco Bell Division | 711 | | Pizza Hut Division | 239 | | Habit Burger & Grill Division | 134 | | Consolidated | 1,933 | Q2 2025 Operating Profit (Loss) by Segment ($MM) | Segment | Operating Profit (Loss) ($MM) | | :-------------------- | :---------------------- | | KFC Division | 365 | | Taco Bell Division | 262 | | Pizza Hut Division | 80 | | Habit Burger & Grill Division | 3 | | Corporate and Unallocated | (88) | | Consolidated | 622 | - The Corporate and Unallocated column includes all amounts deemed Special Items, which are not allocated to segments for performance reporting purposes[57](index=57&type=chunk)[60](index=60&type=chunk) [Notes to Financial Statements (Special Items)](index=20&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Summary%20of%20Results%2C%20Condensed%20Consolidated%20Balance%20Sheets%20and%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The notes provide detailed explanations for financial figures and the nature of Special Items, which include refranchising gains/losses, charges from a resource optimization program, brand headquarters consolidation, and costs related to the termination of franchise agreements in Turkey and re-acquisition of master franchise rights in Germany - Special Items include refranchising gains and losses due to their size and volatility[65](index=65&type=chunk) - Charges of **$14 million** (Q2 2025) and **$32 million** (YTD 2025) were recorded for a resource optimization program aimed at accelerating digital, technology, and innovation capabilities, and optimizing spending[65](index=65&type=chunk) - Charges of approximately **$10 million** (Q2 2025) and **$17 million** (YTD 2025) were incurred for Brand HQ Consolidation, involving relocating KFC U.S. corporate office and requiring U.S.-based remote employees to relocate[65](index=65&type=chunk) - Charges of **$5 million** (Q2 2025) and **$7 million** (YTD 2025) were related to the termination of franchise agreements in Turkey (**283** KFC and **254** Pizza Hut restaurants closed) and the re-acquisition of master franchise rights in Germany[65](index=65&type=chunk) - Tax Expense - Foreign tax audit of **$10 million** (Q2 2025) and **$102 million** (YTD 2025) reflects a reserve associated with a change in management's judgment regarding a Mexican subsidiary's ability to utilize losses[64](index=64&type=chunk)[66](index=66&type=chunk) [Other Information](index=5&type=section&id=Other%20Information) This section outlines Yum! Brands' long-term growth algorithm, conference call details, and important forward-looking statements and company profile information [Long-Term Growth Algorithm](index=5&type=section&id=LONG-TERM%20GROWTH%20ALGORITHM) Yum! Brands has set long-term financial performance targets, first announced in 2022, aiming for sustained growth across key metrics including unit expansion, system sales, and core operating profit - The Company targets the following long-term financial performance metrics, on average[18](index=18&type=chunk) - **5%** Unit Growth - **7%** System Sales Growth, excluding F/X and 53rd week - At least **8%** Core Operating Profit Growth, excluding F/X and 53rd week [Conference Call & Additional Information](index=7&type=section&id=CONFERENCE%20CALL) Details for the Q2 2025 earnings conference call and webcast are provided, along with information on where to access additional financial reports, restaurant count details, and definitions of terms online - Yum! Brands will host a conference call to review Q2 2025 financial performance and strategies on **August 5, 2025**, at **8:15 a.m. Eastern Time**[20](index=20&type=chunk) - The webcast and playback will be accessible via investors.yum.com/events-and-presentations[21](index=21&type=chunk) - Additional information, including quarter-end dates, restaurant count details, definitions of terms, and Restricted Group financial information, is available at investors.yum.com[21](index=21&type=chunk) [Forward-Looking Statements & Company Profile](index=7&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section includes a standard disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ, and provides a brief overview of Yum! Brands, its global operations across over 61,000 restaurants in 155+ countries, and its recognition for sustainability and leadership - Forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially[22](index=22&type=chunk)[23](index=23&type=chunk) - Yum! Brands, Inc. franchises or operates a system of over **61,000** restaurants in more than **155** countries and territories under KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill concepts[25](index=25&type=chunk) - Named to the Dow Jones Sustainability Index North America and 3BL's list of 100 Best Corporate Citizens in **2024** - Recognized among TIME magazine's list of Best Companies for Future Leaders in **2025** - KFC, Taco Bell, and Pizza Hut led Entrepreneur's Top Global Franchises **2024** list, with Taco Bell securing the **No. 1** spot in North America for the **fifth consecutive year** in Entrepreneur's **2025** Franchise 500

Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables. Let's have a look at how Benzinga's most-accurate analysts have rated the company in the recent period. Considering buying YUM stock? Here's what analysts think: Read This Next: Yum! Brands, Inc. YUM will release earnings results for the second quarter before the opening bell on Tuesday, Aug. 5. Analysts expect the Louisvill ...

Company Overview - Yum! Brands is the parent company of Taco Bell, KFC, Pizza Hut, and Habit Burger & Grill, with a current market capitalization of $41 billion [3] - The company is expected to announce its second-quarter earnings on August 5, 2025, with analysts estimating earnings of $1.46 per share on $1.94 billion in revenue, reflecting a 12% increase in earnings year-over-year and a 10% rise in sales [2] Financial Performance - In the past twelve months, Yum! Brands reported total revenue of $7.7 billion, with operating profits of $2.4 billion and a net income of $1.4 billion [3] - The company delivered strong Q1 results, driven by earnings growth and momentum at Taco Bell and KFC, despite a slight revenue miss [3] Historical Trends - Historically, Yum! Brands stock has exceeded expectations after earnings announcements 63% of the time, with a median increase of 1.9% in one day and a maximum observed growth of 10% [2][6] - Over the last five years, there have been 19 recorded earnings data points, with 12 positive and 7 negative one-day returns, indicating a 63% occurrence of positive returns [6] Market Reaction - The results of Yum! Brands will significantly impact market reactions against consensus expectations, and historical trends may favor event-driven traders [3][4] - The correlation between short-term and medium-term returns following earnings can provide a relatively lower-risk strategy for traders [7]

Core Insights - The restaurant industry in 2025 is at a crossroads between "rapid expansion" and "rational cultivation," with a reported 4.3% year-on-year growth in national dining revenue from February to June 2025, indicating a shift to a "slow growth" cycle due to market saturation and intensified competition [2][25] - Despite the slow growth, brands like Mixue Ice City are rapidly expanding, adding over 10,000 stores in a year, while the coffee sector sees three brands in the top growth rankings, highlighting potential opportunities within the slow growth period [2][14] Key Data Points - The top five brands in the growth ranking added over 5,000 stores in the past year, with Mixue Ice City leading by adding 10,160 stores [4] - Coffee and tea drinks dominate the growth list with 26 brands, including 9 coffee and 17 tea brands, while other notable categories include rice noodles (11 brands), fried chicken and burgers (9 brands), and snacks (8 brands) [4] - The growth rate of the top 10 brands by new store count shows that two brands specializing in boiled beef rice noodles achieved over 90% growth [4] Growth Categories Analysis - **Coffee and Tea Drinks**: Brands like Mixue Ice City and Luckin Coffee are expanding rapidly, leveraging supply chain efficiencies to offer competitive pricing. New entrants like Grandpa Not Brewing Tea are also finding success through unique positioning [14][21] - **Snack Foods**: Brands such as Hao Xiang Lai and Zhao Yi Ming are leading the snack food segment, benefiting from direct supply chain sourcing and scale efficiencies, with Zhao Yi Ming adding 376 stores recently [16][17] - **Quick Service Restaurants**: The quick service segment is seeing rapid growth, with brands like Tasitin and Cao's Duck Neck capitalizing on standardized operations and efficient supply chains. However, traditional brands face challenges due to limited marketing and single consumption scenarios [19][21] Slow Growth Cycle Insights - The slow growth cycle presents opportunities at the intersection of supply chain efficiency and user value. Successful brands are those that enhance supply chain capabilities and differentiate through unique user value propositions [23][25] - Brands that remain stagnant often do so due to a lack of innovation and reliance on imitation rather than building competitive barriers [23][25]

Core Viewpoint - Yum Brands (YUM) is expected to report quarterly earnings of $1.45 per share, a 7.4% increase year-over-year, with revenues projected at $1.93 billion, reflecting a 9.5% year-over-year growth [1]. Earnings Projections - The consensus EPS estimate for the quarter has been revised upward by 0.2% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts estimate 'Revenues- Company sales' to reach $680.67 million, indicating a year-over-year increase of 19% [5]. - 'Revenues- Franchise and property revenues' are forecasted at $826.92 million, suggesting a 4.8% year-over-year change [5]. - 'Revenues- Franchise contributions for advertising and other services' are expected to be $426.07 million, reflecting a 6% increase from the previous year [5]. - The KFC Division's franchise contributions for advertising and other services are projected at $159.68 million, a 7.2% year-over-year increase [6]. Same-Store Sales and Restaurant Metrics - System same-store sales for the Taco Bell Division are expected to show a year-over-year change of 5.2%, slightly up from 5.0% last year [6]. - The number of restaurants in the KFC Division (Franchise & License) is estimated to reach 31,934, compared to 30,255 a year ago [7]. - Total restaurants in the Taco Bell Division are projected at 8,803, up from 8,565 in the same quarter last year [7]. - The number of company-owned Taco Bell restaurants is expected to be 510, an increase from 488 last year [8]. - The total number of restaurants in the Pizza Hut Division is estimated at 19,921, compared to 19,864 a year ago [9]. - The total number of restaurants across all divisions is projected to reach 61,524, up from 59,498 last year [10]. Stock Performance - Over the past month, Yum shares have returned -3.9%, while the Zacks S&P 500 composite has increased by 2.3% [11]. - Yum currently holds a Zacks Rank 2 (Buy), indicating potential outperformance in the near future [11].

Core Viewpoint - YUM! Brands, Inc. is expected to report second-quarter 2025 results on August 5, with earnings per share estimated at $1.45, reflecting a 7.4% year-over-year increase, and revenues projected at $1.93 billion, a 9.5% increase from the previous year [1][2][10] Group 1: Revenue and Earnings Estimates - The Zacks Consensus Estimate for earnings per share is $1.45, indicating a 7.4% increase from the prior-year quarter [2] - Revenue estimates are pegged at $1.93 billion, representing a 9.5% increase from $1.76 billion in the prior-year quarter [2][10] Group 2: Growth Drivers - Revenue growth is likely driven by strong performances from Taco Bell U.S. and KFC International, alongside rapid digital expansion across the portfolio [3][10] - Investments in the Byte by Yum! platform, including kiosks and app personalization, are expected to enhance consumer experiences and increase order values [3] - AI-powered marketing initiatives and loyalty programs, such as the "build your own Luxe Box" campaign, are anticipated to deepen brand loyalty and increase traffic [4] Group 3: Menu Innovation and Consumer Engagement - New beverage-led concepts like Taco Bell's Live Mas Cafe and KFC's Quench pilot are expected to attract younger demographics and contribute to top-line growth [5] - Menu innovations, including global items like the Double Down Zinger and Zinger Nachos, are projected to boost consumer engagement and same-store sales [5] Group 4: Same-Store Sales and Revenue Projections - Same-store sales are predicted to grow by 2.2% year-over-year in the upcoming quarter [6] - Revenue estimates for KFC, Taco Bell, and Habit Burger are projected to increase by 11.2%, 7.3%, and 16.3%, respectively, while Pizza Hut revenues are expected to rise by 1.8% [6] Group 5: Bottom-Line Performance - The company's bottom-line performance is expected to benefit from disciplined cost management, operational efficiency, and improved store-level margins [7][10] Group 6: Earnings Prediction Model - The model indicates a likelihood of an earnings beat for YUM! Brands, supported by a positive Earnings ESP of +1.34% and a Zacks Rank of 2 [8][9]

Core Viewpoint - The first KFC in Foshan has relocated after 28 years of operation at Baihua Square, which has sparked public interest and nostalgia among local residents [1][15]. Group 1: Store Closure and Relocation - The KFC store at Baihua Square has officially closed, with all signage removed and the interior being dismantled [3][5][7]. - A notice at the former location indicated that the store moved to the first floor of the Lingnan Tiandi Kandes Hotel due to the expiration of the lease on July 28 [9]. Group 2: New Store Details - The new KFC location is situated at the intersection of Liangyuan Road and Zhaomiao Road, featuring a slightly smaller interior but an external dining area [11][13]. - The store manager confirmed that the decision to relocate was due to the lease expiration and "higher management arrangements," and the original team remains intact without layoffs [11]. Group 3: Historical Significance - The original KFC opened in February 1997, marking a significant milestone as the first KFC in Foshan, and has since become a cherished part of the community's memories [15]. - Many locals shared nostalgic memories associated with the original store, highlighting its role in family gatherings and personal milestones over the years [15].

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Yum Brands identified as a strong candidate due to its favorable growth metrics and Zacks Rank [1][2]. Earnings Growth - Yum Brands has a historical EPS growth rate of 9.9%, but projected EPS growth for the current year is expected to be 10%, significantly outperforming the industry average of 6.7% [4]. Asset Utilization Ratio - The company's asset utilization ratio stands at 1.18, indicating that Yum generates $1.18 in sales for every dollar in assets, compared to the industry average of 0.97, showcasing superior efficiency [5]. Sales Growth - Yum's sales are projected to grow by 6.9% this year, which is notably higher than the industry average growth rate of 2.4% [6]. Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Yum, with the Zacks Consensus Estimate for the current year increasing by 0.3% over the past month, indicating favorable market sentiment [8]. Overall Assessment - Yum Brands has achieved a Growth Score of A and holds a Zacks Rank of 2, reflecting its strong growth potential and positive earnings revisions, making it a solid choice for growth investors [9][10].

Core Concept - The article discusses the concept of "wide moats," which refers to companies with sustainable competitive advantages that protect them from rivals, leading to long-term profitability [1][3]. Group 1: Characteristics of Wide-Moat Companies - Wide-moat companies benefit from strong brand recognition, network effects, high customer switching costs, regulatory hurdles, and economies of scale, creating significant challenges for competitors [3]. - These companies typically enjoy solid pricing power, stable profit margins, and the ability to reinvest in their businesses, further enhancing their competitive edge [3][4]. Group 2: Investment Appeal - Investing in wide-moat companies is attractive due to their ability to deliver steady, long-term returns, especially during economic downturns [4][5]. - These firms generally produce consistent cash flows and provide shareholder value through dividends and stock price appreciation [5]. Group 3: Company Examples - Lam Research Corporation (LRCX) holds a leadership position in wafer fabrication equipment, benefiting from deep expertise and long-term customer relationships, which form a strong competitive moat [7]. - Adobe Inc. (ADBE) maintains dominance in creative software with high switching costs and a subscription model that ensures recurring revenues [10][11]. - The Walt Disney Company (DIS) leverages unmatched brand equity and a global media ecosystem, successfully transforming its streaming business into a profitable growth engine [15]. - Yum! Brands, Inc. (YUM) benefits from a strong franchise model and global scale, with its brands being leaders in their respective food categories [19]. Group 4: Growth and Innovation - Lam Research is positioned to benefit from the growth in the semiconductor memory market driven by advancements in AI, machine learning, and cloud computing [8][9]. - Adobe's integration of AI-powered tools enhances its creative platform, attracting a growing user base and addressing the needs of professionals [12][13]. - Disney's strategic investments in its parks and streaming services are expected to drive significant growth and profitability [17][18]. - Yum! Brands is focused on next-generation growth initiatives, streamlining operations, and expanding its digital platforms to enhance efficiency [20][21].