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- Yum! Brands, the parent company of Taco Bell and KFC, reported second-quarter earnings Thursday that beat analyst expectations.
- Shares rose on the report.
- Fast-casual restaurants have had a solid year with Starbucks and McDonald’s also recently posting earnings beats.
- Watch Yum! Brands trade live on Markets Insider.
Fast-food is going strong.
Yum! Brands — the parent company of fast-food restaurants like Taco Bell, KFC, and Pizza Hut — released second-quarter earnings Thursday that beat analyst expectations. It’s the latest fast-casual restaurant company to report an earnings beat.
Shares rose as much as 4% on the news.
Here’s what the company reported versus what analysts surveyed by Bloomberg expected:
Adjusted earnings-per-share: $0.93 reported versus $0.87 (expected)
Revenue: $1.31 billion reported versus $1.27 billion (expected)
Taco Bell drove the strong company earnings, leading comparable sales with a 7% gain. Overall, comparable sales were up 5% during the quarter, the company said in a press release.
KFC also posted strong growth, particularly in China, an emerging opportunity for the chain. Even Pizza Hut, which has struggled in the past, posted same store sales growth in the US and abroad in the second quarter.
"Second-quarter results maintained early year momentum and helped us to exceed our already high expectations for a strong first half of 2019," said CEO Greg Creed in a statement.
The strong earnings come just after Starbucks, McDonald’s and even competitor Chipotle also reported strong second-quarter earnings. Fast-casual restaurants have had a great year — and some have even outperformed the S&P 500.
Going forward, Yum is growing through franchising — it now has more than 2,000 total franchises— and increasing its growth rate by opening new units. In the second-quarter, the company opened 312 units, a 7% increase from the year prior.
Yum’s earnings were also given a boost from an early investment in Grubhub, the delivery service. In the second-quarter they saw pre-tax investment income of $24 million, which meant a $0.06 boost to earnings per share during the quarter.
The company also repurchased 1.9 million of its own shares at $104 per share, a $196 million investment. It also reaffirmed that it is on track for its full year outlook of earnings per share of at least $3.75.
Yum Brands is up 25% year to date.
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