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Yum! Brands 8-K Report, Financial Results (May 1, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 1, 2024
Period End
May 1, 2024
Security
YUM
In the record · 2016–202610-K1110-Q328-K146

YUM filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 146 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jun ’17Jun ’17
  2. Material agreement8-K · Apr ’20Apr ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed May 1, 2024. Cited figures are marked; the original filing is the authoritative source.

Yum!

Brands, Inc. reported first-quarter 2024 results for the quarter ended March 31, 2024. Worldwide system sales grew 2% excluding foreign currency translation, with unit count up 6% on 808 gross new unit openings, while same-store sales declined 3%. GAAP operating profit declined 1% to $520 milliona, but core operating profit grew 6% to $555 million.

GAAP diluted EPS was $1.10b, compared with $1.05 a year earlier, and EPS excluding Special Items was $1.15, compared with $1.06. Total revenues fell to $1,598 million from $1,645 million, while net income rose to $314 million from $300 million. By division, KFC system sales grew 4% excluding F/X and Taco Bell grew 4%, while Pizza Hut declined 4%.

Management attributed the same-store sales pressure to a difficult operating environment and said it was encouraged by strong two-year same-store sales growth and positive momentum exiting the quarter. Digital sales approached $8 billionc, and the digital mix exceeded 50% for the first time. CEO David Gibbs said the company is positioned to surpass 60,000 restaurants this year.

Other items include the sale of the company's ownership interest in Devyani International Limited for pre-tax proceeds of $104 milliond, with pre-tax investment losses of $20 million recognized before the sale. The company completed the acquisition of 218 KFC franchise restaurants in the U.K. and Ireland on April 29, 2024.

Disclosures on outstanding debt in the Restricted Group capital structure will be provided with the first-quarter Form 10-Q. Dividends declared were $0.67 per share, compared with $0.605 a year earlier.

02—Key points

Key Highlights

  1. Worldwide system sales grew 2% excluding F/X, with KFC at 4%, Taco Bell at 4% and Pizza Hut at (4)%.
  2. Unit count increased 6% on 808 gross new units, and KFC International unit growth was +10%.
  3. GAAP operating profit declined 1% to $520 million; core operating profit grew 6% to $555 million.
  4. GAAP diluted EPS rose 5% to $1.10; EPS excluding Special Items rose 9% to $1.15.
  5. Worldwide same-store sales declined 3%, with Taco Bell U.S. same-store sales up 2% and Pizza Hut same-store sales down 7%.
  6. Digital sales approached $8 billion, and the digital mix exceeded 50% for the first time.
  7. Sold the Devyani International Limited stake for $104 million in pre-tax proceeds and completed the acquisition of 218 KFC franchise restaurants in the U.K. and Ireland on April 29, 2024.

03—Questions

Frequently Asked Questions

  1. How did Yum! Brands perform in the first quarter of 2024?

    Worldwide system sales grew 2% excluding F/X, unit count grew 6%, and same-store sales declined 3%. GAAP operating profit declined 1% to $520 million, while core operating profit grew 6% to $555 million. Net income rose to $314 million from $300 million.

  2. Why did GAAP results differ from core operating profit growth?

    Core operating profit excludes Special Items and F/X. Special Items expense was $24 million in the quarter, compared with $3 million a year earlier, and mainly reflects $21 million of charges for a resource optimization program recorded to general and administrative expenses. The company also cited a $11 million negative F/X impact on divisional operating profit.

  3. How did each division perform?

    KFC system sales grew 4% excluding F/X, with same-store sales down 2% and operating profit up 3% to $313 million. Taco Bell system sales grew 4%, same-store sales rose 1%, and operating profit rose 2% to $208 million. Pizza Hut system sales declined 4% excluding F/X, same-store sales fell 7%, and operating profit declined 11% to $93 million.

  4. What portfolio transactions occurred during the quarter and after quarter-end?

    During the quarter, the company sold its ownership interest in Devyani International Limited for pre-tax proceeds of $104 million and recognized pre-tax investment losses of $20 million related to changes in fair value before the sale. On April 29, 2024, the company completed the acquisition of 218 KFC franchise restaurants in the U.K. and Ireland.

  5. What additional information did the company say would be provided later?

    The company stated that disclosures pertaining to outstanding debt in its Restricted Group capital structure will be provided at the time of the filing of the first-quarter Form 10-Q. The company also declared dividends of $0.67 per common share, compared with $0.605 a year earlier.

04—Continue

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