Financial Data and Key Metrics Changes - System sales grew by 4%, driven by strong unit growth at KFC International and market share gains at Taco Bell U.S. [6][30] - Digital sales increased by 18%, with a digital mix reaching a record 57%, up two points from the previous quarter [30][8] - Total restaurant level margins were 16.3%, down approximately 150 basis points year over year due to unfavorable commodity impacts [31][32] - Core operating profit increased by 2% to $646 million, with ex-special EPS at $1.44, up 7% year over year [32][33] Business Line Data and Key Metrics Changes - KFC contributed 52% of Yum! Brands' divisional operating profit, with same-store sales growth of 3% in key international markets [10][11] - Taco Bell accounted for 37% of divisional operating profit, achieving 4% same-store sales growth, outpacing the limited service category in the U.S. by four percentage points [13][14] - Pizza Hut represented 11% of divisional operating profit, with same-store sales growth of 2% internationally, driven by recovery in the Middle East and strong performance in South Asia [15][17] Market Data and Key Metrics Changes - KFC International's same-store sales growth was driven by strong performance in South Africa, Spain, Canada, Japan, and the UK [10] - Taco Bell's same-store sales grew 5% in Europe, with double-digit increases in Canada and India [15] - Habit Burger and Grill experienced a year-over-year system sales decline of 1%, reflecting continued softness in consumer demand [17] Company Strategy and Development Direction - The company aims to be the most loved and trusted brand globally, focusing on digital sales and AI-driven personalized marketing [8][23] - KFC U.S. is implementing the Kentucky Fried Comeback campaign to improve performance in underperforming regions [11] - Taco Bell is expanding its beverage offerings with the Live Mas Cafe, targeting a $5 billion beverage market in the U.S. [19][76] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough consumer environment but noted Taco Bell's strong performance across all income bands [80][81] - The company expects to achieve 8% core operating profit growth for the year, with a focus on optimizing company store profits and managing G&A expenses [56][60] - Management remains optimistic about the future, citing strong digital capabilities and ongoing development momentum [45][48] Other Important Information - The company has made significant strides in sustainability, achieving 89% of suppliers certified for food safety initiatives and sourcing 94% cage-free eggs [24][25] - The transition of CEO from David Gibbs to Chris Turner is set to occur on October 1, with Gibbs remaining as an advisor until 2026 [6][28] Q&A Session Summary Question: Guidance for the year and confidence in achieving 8% operating profit growth - Management remains on track to deliver 8% core operating profit growth, with solid performance expected in the second half [54][56] Question: Technology capabilities and their impact on metrics - The BITE strategy is positively impacting both top and bottom lines, with AI-enabled marketing showing strong returns [61][63] Question: Capital intensity and future unit development - The company will continue to be asset-light, focusing on high-performing restaurants and ensuring strong returns on investments [70][73] Question: Beverage strategy and differentiation - Taco Bell is well-positioned in the beverage market, with plans to expand the Live Mas Cafe and leverage proprietary beverages [76][77] Question: Consumer environment and brand positioning - Taco Bell is gaining market share even in a pressured consumer environment, with consistent sales growth across income bands [81][82]

Financial Data and Key Metrics Changes - System sales grew by 4%, driven by strong unit growth at KFC International and market share gains at Taco Bell U.S. [5][30] - Digital sales increased by 18%, with a digital mix reaching a record 57%, up two points from the previous quarter [30][6] - Core operating profit increased by 2% to $646 million, with adjusted EPS at $1.44, up 7% year over year [32][33] Business Line Data and Key Metrics Changes - KFC contributed 52% of Yum! Brands' divisional operating profit, with KFC International growing same-store sales by 3% [8][12] - Taco Bell accounted for 37% of divisional operating profit, achieving 4% same-store sales growth, outpacing the limited service category in the U.S. by four percentage points [12][13] - Pizza Hut represented 11% of divisional operating profit, with same-store sales growth of 2% internationally, driven by recovery in the Middle East and strong performance in South Asia [15][14] Market Data and Key Metrics Changes - KFC International saw strong performance in key markets including South Africa, Spain, Canada, Japan, and the UK [8][10] - Taco Bell's same-store sales grew 5% in Europe, with double-digit increases in Canada and India [14] - Habit Burger and Grill experienced a year-over-year system sales decline of 1%, reflecting continued softness in consumer demand [15] Company Strategy and Development Direction - The company aims to be the most loved and trusted brand globally, focusing on digital sales and AI-driven personalized advertising [6][7] - KFC U.S. introduced the "Kentucky Fried Comeback" campaign to improve performance in underperforming regions [10] - Taco Bell is expanding its beverage offerings with the Live Mas Cafe, targeting the $25 billion beverage category in the U.S. [18][76] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough consumer environment but noted Taco Bell's ability to gain market share across all income bands [80][81] - The company expects to achieve 8% core operating profit growth for the year, with a strong focus on optimizing company store profits and refranchising gains [53][56] - Management expressed confidence in the long-term growth potential, emphasizing the strength of their digital capabilities and operational scale [45][48] Other Important Information - The company opened 871 gross new units in the quarter, translating to 386 net new units [33][34] - The company is committed to sustainability, achieving 89% of suppliers certified in food safety initiatives and sourcing 94% cage-free eggs [23][24] - Yum! Brands plans to maintain a strong and flexible balance sheet while returning excess capital to shareholders [44][45] Q&A Session Questions and Answers Question: Guidance for the year and confidence in achieving 8% operating profit growth - Management remains on track to deliver 8% core operating profit growth, with solid performance expected in the second half [53][54] Question: Technology capabilities and their impact on metrics - The Byte strategy is positively impacting both top and bottom line, with strong correlations between digital sales mix and sales growth [61][62] Question: Future capital intensity and CapEx benchmarks - The company will continue to be asset-light, maintaining a low percentage of restaurant ownership while ensuring high returns on tech investments [71][72] Question: Beverage strategy and differentiation - Taco Bell is well-positioned in the beverage market, leveraging successful proprietary drinks and expanding the Live Mas Cafe concept [76][77] Question: Consumer environment and brand positioning - Despite a challenging consumer environment, Taco Bell has consistently shown positive sales growth across all income bands, indicating strong brand resilience [80][81]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $307.9 million, an increase of 19.1% compared to the previous year [25] - Same restaurant sales growth was 3.5%, with same restaurant traffic growth of 2% [25][26] - Adjusted EBITDA decreased to $30.4 million, down $4.9 million from the previous year, with adjusted EBITDA margin declining to 9.9% from 13.7% [29] Business Line Data and Key Metrics Changes - The company opened 17 new system-wide restaurants in Q2, including 15 company-owned and 2 franchise-owned, bringing the total to 600 restaurants [30] - The acquisition of 40 franchise locations contributed approximately $7 million to revenue and $1 million to adjusted EBITDA [30] Market Data and Key Metrics Changes - The company reported positive same restaurant traffic growth in April, May, and June, with April being the best month in over two years [8][25] - The third-party delivery channel saw significant growth, with traffic increasing materially during Q2 [26] Company Strategy and Development Direction - First Watch aims to open 62 to 67 new locations in 2025, with a strong pipeline of over 130 new sites approved [10][32] - The company is focusing on enhancing customer experience through digital innovations and culinary offerings, including a seasonal menu that changes every ten weeks [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive traffic growth for the remainder of 2025, citing strong underlying trends and effective marketing strategies [8][30] - The company is lowering its commodity cost inflation guidance to 5% to 7%, down from high single digits, due to improved egg supply [33] Other Important Information - Labor and related expenses were 33.2% of sales, reflecting a 40 basis point increase from the previous year, driven by labor inflation and higher health benefit costs [28] - The company is committed to maintaining a culture of engagement and improving employee retention, with turnover rates below industry averages [21][22] Q&A Session Summary Question: Customer demographics and market expansion - Management indicated that the shift towards a younger customer base is due to expanding into new markets and effective outreach to younger generations [39][41] Question: Confidence in raised EBITDA outlook - The relief in egg costs and positive trends in same restaurant traffic provided confidence for raising the EBITDA outlook [47][49] Question: Pricing strategy and margin implications - The pricing strategy remains consistent, with adjustments made to offset permanent inflation rather than temporary increases [51][53] Question: Marketing tactics and traffic growth - Marketing efforts have been focused on core geographies, leading to tangible traction and increased customer frequency [58][61] Question: Impact of new restaurant openings on margins - New restaurants typically operate at lower margins initially, but their strong sales levels help offset this effect [113][114] Question: COGS performance amid inflation - The company managed to keep COGS lower than expected through effective management despite inflation pressures [117][119] Question: Drivers of top-line growth - Improvement was seen across all dayparts, indicating a positive consumer response to the company's hospitality and quality offerings [121][123]

Financial Data and Key Metrics Changes - The company achieved record highs in revenue, operating profit, and operating profit margin for Q2 2025, with operating profit growing 14% to $304 million [5][29] - Same store sales growth turned positive at 1%, marking the tenth consecutive quarter of same store transaction growth [6][36] - System sales growth reached 4%, showing a sequential improvement of two percentage points [6][26] - Restaurant margin improved by 60 basis points, and operating profit margin increased by 100 basis points year over year [7][29] Business Line Data and Key Metrics Changes - KFC achieved 5% system sales growth and a healthy restaurant margin in Q2, operating over 12,000 stores in more than 2,400 cities [8][9] - Pizza Hut sustained a 2% same store sales growth, with a 17% increase in same store transactions, operating over 3,800 stores [9][22] - K Coffee Cafe contributed to incremental sales, with average cups sold increasing and a total of 1,300 locations nationwide [20][21] Market Data and Key Metrics Changes - Delivery sales accounted for around 45% of total sales mix, up from 38% in the same quarter last year [14][16] - The company opened 336 net new stores in Q2, with a total of 12,238 stores for KFC and 3,864 stores for Pizza Hut [19][24] Company Strategy and Development Direction - The company is focused on operational efficiency and innovation, with a dual strategy targeting both same store sales and system sales growth [5][10] - The introduction of new store formats, such as Pizza Hut Wow! stores, aims to penetrate lower-tier cities and improve profitability [25][66] - The company plans to maintain a balanced approach to delivery, leveraging both third-party platforms and its own channels to enhance visibility and traffic [16][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year targets for 2025, including new store openings and system sales growth [34][44] - The competitive landscape remains challenging, but the company aims to protect margins while driving sales through core competencies [51][112] - The company anticipates a steady same store sales level year over year in the second half, despite macroeconomic uncertainties [36][54] Other Important Information - The company returned a total of $536 million to shareholders in the first half of the year, with plans to return at least $1.2 billion in 2025 [32][33] - Capital expenditure guidance was revised down from $700-800 million to $600-700 million due to lower CapEx per store [39][95] Q&A Session Summary Question: Delivery business growth and margin impact - Management acknowledged intense competition in the delivery space but emphasized a focus on core competencies and maintaining price integrity [50][52] Question: New store format performance and targets - Management confirmed that the Pizza Hut Wow! model is showing promising results, with no specific guidance on store openings yet [61][66] Question: Potential for Pizza Hut's restaurant and operating margins - Management indicated that there is room for improvement in Pizza Hut's margins, with a focus on operational efficiency and cost management [70][76] Question: Impact of delivery platform subsidies on margins - Management stated that larger brands like Yum China enjoy favorable subsidy arrangements, which helps mitigate margin impacts [82][83] Question: Average check trends at KFC - Management noted that while average check may decline due to smaller orders, the focus remains on driving same store transaction growth [88][91] Question: CapEx guidance and future trends - Management explained that the CapEx reduction is primarily due to lower CapEx per store, with expectations for similar trends in the future [94][96] Question: Franchise mix strategy - Management clarified that the decision to open franchise stores is based on strategic alignment and market conditions, particularly in lower-tier cities [102][105] Question: Competitive environment and margin preservation - Management reiterated the importance of maintaining a balance between sales growth and margin protection amidst competitive pressures [110][112]

Q2 2025 SUPPLEMENTAL INFORMATION August 5, 2025 CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES FORWARD LOOKING STATEMENTS In addition to historical information, this presentation may contain a number of "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All ...

Financial Data and Key Metrics Changes - The company achieved record highs in revenue, operating profit, and operating profit margin for Q2 2025, with operating profit growing 14% to $304 million [10][31] - Same store sales growth turned positive at 1%, with system sales growth reaching 4%, showing a sequential improvement of two percentage points [9][28] - Restaurant margin improved by 60 basis points, and operating profit margin increased by 100 basis points year over year [10][31] Business Line Data and Key Metrics Changes - KFC achieved 5% system sales growth and a healthy restaurant margin, operating over 12,000 stores in more than 2,400 cities [10][11] - Pizza Hut sustained 2% same store sales growth, with a 17% increase in same store transactions, and improved margins through operational efficiency [11][24] - K Coffee Cafe contributed to incremental sales, with average cups sold increasing and a total of 1,300 locations nationwide [22][12] Market Data and Key Metrics Changes - Delivery sales accounted for around 45% of total sales mix, up from 38% in the previous year, driven by promotions and own channels [16][18] - The company opened 336 net new stores in Q2, with a total of 12,238 KFC stores and 3,864 Pizza Hut stores [21][26] - The franchise store mix for new openings was 41% for KFC and 26% for Pizza Hut, ahead of schedule [37] Company Strategy and Development Direction - The company is focused on operational efficiency and innovation, with initiatives like K Coffee Cafe and the Pizza Hut Wow model aimed at expanding market reach [47][68] - The company plans to achieve 1,600 to 1,800 net new store openings in 2025, with a solid pipeline for growth [37][36] - The company is committed to returning $3 billion to shareholders from 2025 through 2026, maintaining a healthy cash position of $2.8 billion [35][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year targets for 2025 despite complex market conditions, with a focus on maintaining margins and protecting price integrity [36][47] - The company anticipates steady same store sales levels year over year in the second half, while facing challenges from delivery platform competition [38][56] - Management highlighted the importance of balancing sales growth with margin protection, learning from past experiences in competitive environments [120][121] Other Important Information - The company is raising its 2025 target for K Coffee Cafe locations from 1,500 to 1,700 due to strong performance [22] - The company is committed to digitization initiatives, including AI, to drive growth and efficiency [44][45] - The average annual capital return is around 8% to 9% of market cap, with flexibility regarding the split of capital returns between years [35] Q&A Session Summary Question: Insights on delivery business growth and margin impact - Management acknowledged intense competition in the delivery space but emphasized a balanced approach to drive top-line growth while protecting margins [53][55] Question: New format store opening targets and profitability - Management confirmed over 20 Wow stores opened, with encouraging sales and margin levels, but did not provide specific opening targets for the new model [66][71] Question: Potential ultimate goals for Pizza Hut's margins - Management indicated that mid to long-term improvements in Pizza Hut's margins are expected, with potential to reach levels closer to KFC [80][82] Question: Impact of delivery platform subsidies on margins - Management noted that larger brands like Yum China enjoy favorable subsidy arrangements, minimizing the impact on margins [87][89] Question: Changes in average check trends at KFC - Management explained that the average check at KFC was positively impacted by a higher delivery mix, but a downward trend is expected in the second half due to smaller orders [95][96] Question: CapEx guidance and future trends - Management lowered CapEx guidance due to reduced CapEx per store, indicating a stable trend for future years [100][105] Question: Franchise store opening decisions - Management clarified that franchise stores are incremental and strategically opened in lower-tier cities and high-traffic locations [110][111] Question: Competitive environment and margin preservation - Management reiterated the importance of maintaining price integrity and not sacrificing margins for sales growth amid competitive pressures [120][121]

Jim Cramer, former hedge fund manager and Mad Money host, has singled out three stocks he believes have strong upside potential.In an August 4 post on X, Wall Street’s leading “inverse indicator” mentioned Palantir (NASDAQ: PLTR), Shake Shack (NYSE: SHAK), and Cloudflare (NYSE: NET) as his current picks.Although Cramer did not elaborate on why he chose those three stocks specifically, he has talked about them on a number of occasions in the recent weeks, so his stance is hardly surprising in hindsight.Likin ...

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]

Financial Performance - System sales grew by 4% YoY in Q2, excluding F/X impact[5] - Same-store sales increased by 1% YoY in Q2[5] - Operating Profit reached $304 million in Q2, a 14% increase YoY[5] - Diluted EPS grew to $0.58, a 5% increase YoY, or 15% excluding mark-to-market impact & F/X[5] - Digital sales exceeded $5 billion in 1H 2025[15] Store Expansion and Franchising - The company added 336 net new stores in Q2 and 583 in 1H[7] - Net new unit contribution to system sales was 4% in Q2[7] - KFC has 12,238 total stores, with 14% franchised[10] - Pizza Hut has 3,864 total stores, with 6% franchised[10] Brand Performance - KFC system sales grew by 5% YoY, with a 1% increase in same-store sales in Q2[20] - KFC's operating profit margin was 14%, a 90 bps increase YoY[20] - Pizza Hut system sales grew by 3% YoY, with a 2% increase in same-store sales in Q2[27] - Pizza Hut's operating profit grew by 16% YoY, with an operating profit margin of 83%, a 90 bps increase YoY[27] Capital Returns - The company targets $3 billion in capital returns for 2025-26 and $45 billion for 2024-26[37] - Net cash by the end of June 2025 was $28 billion[37]

Domino’s Pizza pinned the uncertainty from the UK Labour government’s fast-approaching autumn budget as a factor for cutting its profit outlook https://t.co/MRRLoafd7P ...