01—Abstract
Summary
Summary of the 10-K filed February 19, 2025. Cited figures are marked; the original filing is the authoritative source.
Yum!
Brands, Inc. (YUM) reported fiscal 2024 total revenues of $7.55 billiona, up from $7.08 billion in 2023, and operating profit of $2.40 billion versus $2.32 billion. Diluted EPS was $5.22 (GAAP) and $5.48 excluding Special Items, with full-year EPS excluding Special Items and the 53rd week at $5.39. Fiscal 2024 included a 53rd week that added $96 million to total revenues and $0.09 per share to diluted EPS.
The system spans more than 61,000 restaurants in over 155 countries and territories, 98%b of which are franchised. Worldwide same-store sales declined 1% and system sales rose 3% as reported. Core Operating Profit grew 9%.
Net cash provided by operating activities was $1.69 billionc. The company's total debt was approximately $11.4 billion at year-end. Management stated it expects to maintain a consolidated net leverage ratio of about 4.0x EBITDA over the medium term by issuing incremental debt, and plans to deliver materially higher capital returns than in the prior two years.
The Board declared a quarterly dividend of $0.71d per share in February 2025, a 6% increase from $0.67, and $1.6 billion remained under the May 2024 share repurchase authorization. Key risk items include an IRS proposed adjustment for fiscal 2014 asserting an underpayment of $2.1 billion plus $418 million in penalties, with interest estimated at about $1.4 billion through December 31, 2024, which the company is contesting and for which no reserve is recorded. The Middle East conflict was a roughly one-point headwind to worldwide same-store sales, and the company terminated its Turkey franchise agreements in January 2025.
The company acquired 216 KFC restaurants in the U.K. and Ireland in April 2024, and sold its approximate 5% Devyani investment for $104 million pre-tax. Digital sales were $33 billion, representing over 50% of system sales.
02—Key points
Key Highlights
- Total revenues rose to $7.55 billion in 2024 from $7.08 billion in 2023; GAAP diluted EPS was $5.22 versus $5.59, and EPS excluding Special Items was $5.48 versus $5.17.
- Worldwide Core Operating Profit grew 9% and system sales grew 3% as reported (4% excluding FX), while worldwide same-store sales declined 1%.
- The fiscal 2024 53rd week added $96 million to total revenues, $36 million to operating profit and about $0.09 to diluted EPS.
- Net cash provided by operating activities was $1.69 billion in 2024 versus $1.60 billion in 2023, and total debt was approximately $11.4 billion at year-end.
- Management plans to keep net leverage near 4.0x EBITDA and to deliver materially higher capital returns than in the prior two years.
- The quarterly dividend was increased 6% to $0.71 per share, and $1.6 billion remained under the May 2024 repurchase authorization.
- The IRS asserts a $2.1 billion underpayment plus $418 million in penalties for fiscal 2014; the company disagrees and is contesting it, and no reserve is recorded.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Yum! Brands kept $0.20.
- Revenue$7.55B100.0%
- Cost of revenue−$2.12B28.1%
- Gross profit$5.43B71.9%
- Operating costs−$3.03B40.1%
- Operating income$2.40B31.8%
- Interest, other & tax−$917.0M12.1%
- Net income$1.49B19.7%
Where FY2024 revenue went
$7.55B- Operating costs: $3.03B, 40% of revenue
- Cost of revenue: $2.12B, 28% of revenue
- Net income: $1.49B, 20% of revenue
- Interest, other & tax: $917.0M, 12% of revenue
Kept 20% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 19, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $7.55B$7.08B | +6.7% |
| Cost of Revenue | $2.12B$1.77B | +19.5% |
| Gross Profit | $5.43B$5.30B | +2.4% |
| Operating Expenses | $5.15B$4.76B | +8.2% |
| Operating Income | $2.40B$2.32B | +3.7% |
| Interest Expense | $542.00M$602.00M | −10.0% |
| Net Income | $1.49B$1.60B | −7.0% |
| EPS (Basic) | $5.28$5.68 | −7.0% |
| EPS (Diluted) | $5.22$5.59 | −6.6% |
| Shares Outstanding (Basic) | 282.00M281.00M | +0.4% |
| Shares Outstanding (Diluted) | 285.00M285.00M | 0.0% |
05—Questions
Frequently Asked Questions
How did Yum! Brands perform financially in 2024?
Total revenues increased to $7.55 billion from $7.08 billion, and operating profit rose to $2.40 billion from $2.32 billion. GAAP diluted EPS declined to $5.22 from $5.59, reflecting a higher effective tax rate of 21.8% versus 12.1%. Excluding Special Items, diluted EPS grew to $5.48 from $5.17.
What is the scale and franchise structure of the business?
YUM has over 61,000 restaurants in more than 155 countries and territories across the KFC, Taco Bell, Pizza Hut and Habit Burger & Grill concepts. At December 31, 2024, 98% of units were operated by franchisees or licensees, and digital sales were $33 billion, over 50% of system sales.
What are the main risks flagged for investors?
Key risks include the pending IRS proposed adjustment for fiscal 2014, the company's reliance on its largest franchisee Yum China, exposure to the Middle East conflict, which the company said was roughly a one-point headwind to same-store sales, foreign currency fluctuations, and the January 2023 ransomware incident and related class actions.
How much debt does the company carry and how will it be managed?
Total outstanding short-term borrowings and long-term debt were approximately $11.4 billion at December 31, 2024, with about 96% effectively fixed after interest rate swaps. The company expects to maintain net leverage near 4.0x EBITDA over the medium term by issuing incremental debt as the business grows.
What capital returns did the company announce?
In February 2025 the Board declared a quarterly dividend of $0.71 per share, payable March 7, 2025, totaling about $200 million. In 2024 the company paid four dividends of $0.67 per share. Its May 2024 authorization allows up to $2.0 billion of repurchases through December 31, 2026, with $1.6 billion remaining at year-end.
06—Continue