Yum Brands tops Q3 adjusted EPS estimates

Overview

• Global restaurant operator's Q3 adjusted EPS beat analyst expectations

• KFC unit count grew 7% in Q3

• Company completed Pizza Hut divestiture and returned $1.8 bln to shareholders year-to-date

Outlook

• Yum Brands targets 5% unit growth over the long term

• Company aims for 7% system sales growth, excluding F/X, over an extended period

• Yum Brands expects at least 8% core operating profit growth, excluding F/X, long term

Result Drivers

• KFC UNIT EXPANSION - KFC division drove results with 7% unit growth; unit gross opened 878 new restaurants across 66 countries

• DIGITAL SALES GROWTH - Digital system sales reached $9 bln, accounting for 64% of total sales

• TACO BELL - Excluding forex effects, Taco Bell International system sales rose 14% and same-store sales grew 5%, but US same-store sales fell 4%

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 15 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy"

• Wall Street's median 12-month price target for Yum! Brands, Inc. is $171.70, about 8.9% above its November 2 closing price of $157.60

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 22 three months ago

Reuters Recommended Reads

• Nov 3 - China's Yum China Q3 revenue rises on store expansion

• Nov 2 - Pizza Hut, KFC India operator's Q2 loss narrows sharply on strong same-store sales growth

• Nov 2 - Canada's Pizza Pizza Royalty Q3 same store sales fall on weak consumer spending

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)