Earnings Analysis November 3, 2026

Yum Brands ($YUM) Q3 2026 Earnings Analysis: Both EPS and Revenue Beat Estimates, Pizza Hut Divestiture Completed

Earnings Report

Revenue: $2.054 billion (YoY +4%, expected $2.037 billion) ✅ Beat

EPS (Earnings Per Share): $1.56 (excluding special items, vs. $1.58 YoY, expected $1.46) ✅ Beat

Guidance: Not provided · No quarterly or annual outlook provided; maintaining only the long-term targets presented in 2022 (5% unit growth, 7% system sales growth, and over 8% core operating profit growth)

Stock Reaction: After-hours +3.56% ($163.21, as of 11-03 21:41 KST)

Highlights

KFC Unit Growth +7%: KFC opened 878 new stores across 66 countries, and on a company-wide basis excluding Pizza Hut, a total of 955 new stores were opened.

Adjusted EPS Beat Expectations: At $1.56, it exceeded the expected $1.46 by $0.10.

Digital Sales Surpassed $9 billion: Digital channels accounted for 64% of total system sales.

KFC is the driver of growth. Excluding currency fluctuations, system sales increased by 6%, and international operations also contributed as Taco Bell International saw a 5% increase in same-store sales. The company returned $1.8 billion to shareholders through dividends and share buybacks this year.

Lowlights

Taco Bell US Same-Store Sales -4%: System sales also decreased by 3%. Direct-store margin was 20.5%.

KFC US System Sales -6%: Revenue in the US market showed a declining trend.

KFC Division Total Direct-Store Margin 12.3%: Down 1.4 percentage points compared to the same period last year. The primary cause of the margin decline was the low margin from 15 stores currently testing the Saucy brand.

Core Operating Profit Decreased 4%: At $654 million, it fell short of the $684 million recorded in the same period last year. Taco Bell's operating profit also decreased by 5%.

If Pizza Hut is excluded from both 2025 and 2026, core operating profit increased by 1%. The company stated that since late September, the Taco Bell US entity has been outperforming the industry average. Until that rebound is confirmed in the figures, recovering US sales remains the key.

What the Company Said

CEO Chris Turner evaluated that Yum Brands, having completed the sale of Pizza Hut, has entered its next chapter of growth, and that KFC recorded its largest-ever global store openings as of the third quarter. Instead of providing quarterly outlooks, the company reaffirmed the long-term growth targets released in 2022.

Market Reaction and Future Key Points

Both adjusted earnings per share and revenue exceeded expectations, and the completion of the Pizza Hut sale and KFC store opening records were also confirmed. However, system sales for KFC in the US (-6%) and same-store sales for Taco Bell in the US (-4%) are still on a declining trend.

A key point to monitor is whether Taco Bell's US same-store sales turn positive in the next quarter.

It remains to be seen whether the trend of KFC China's system sales growth stalling at 3% continues.

The key factor is whether the 1% core operating profit growth rate (excluding Pizza Hut) is maintained in the fourth quarter.

Earnings Call Summary

Once the company script is released following the earnings call, the key takeaways from the call will be added to this section. We will select and summarize only the most important details, such as how management explained performance and outlook, and what analysts inquired about.