Taco Bell Recovery Claims Outrun Yum! Brands’ Q3 Numbers

Taco Bell reported a 4% drop in U.S. same-store sales for Q3, but recovery is accelerating. International sales rose 5%. Yum Brands completed Pizza Hut sale, opened 955 new units, and returned $1.8B to shareholders. KFC saw 6% global sales growth but a 6% U.S. decline. Yum's 'Raise the B.A.R.' strategy focuses on modernization and loyalty programs.

Yum Brands reported mixed Q1 results: KFC saw 1% same-store and 6% system sales growth globally, but U.S. systemwide sales fell 6%. Habit Burger & Grill had 3% system sales growth. Foodtastic offered $702M to acquire MTY Group, criticizing its operational discipline. MTY's CEO was replaced. 7 Brew added five bakery items to its menu, priced at $3 each, responding to customer demand.

RBC raised Yum! Brands' (YUM) price target to $180, citing Taco Bell's recovery. Taco Bell's Q3 same-store sales declined 4%, beating estimates. KFC's sales missed estimates, but Yum China raised its 2026 location target. YUM reported mixed Q3 2026 results, with EPS beating estimates but revenue missing. The company plans to refinance $1.6B in debt, expecting a 2% earnings headwind. 12 analysts have revised earnings downwards.

Yum! Brands reported Q3 earnings, highlighting Taco Bell's 25% U.S. loyalty membership growth and 20.2% restaurant-level margin. KFC saw 6% system sales growth, with international expansion driving performance. Yum! expects KFC's Q4 margins to range from 21.5% to 23.5%. The company opened 955 new restaurants, excluding Pizza Hut, and plans to expand KFC's modernization strategy globally. Yum! reported $2.1 billion in cash and expects to address $1.6 billion in maturing debt by mid-2024.

Yum Brands reported a 4% drop in Taco Bell's same-store sales, worse than expected, due to a cyclosporiasis outbreak. Foot traffic fell 20% at its peak. CEO Turner noted recovery since September. Overall, Yum's same-store sales were flat, missing estimates. Operating profit rose to $2.32B, boosted by Pizza Hut's sale.

KeyBanc maintained a Sector Weight rating on Yum! Brands (YUM) after its Q3 earnings beat, citing attractive valuation metrics. YUM reported adjusted EPS of $1.56, exceeding estimates, but revenue missed at $2.05B. Taco Bell and KFC saw comparable sales of -4% and +1%, respectively. KeyBanc adjusted its EPS estimates downward for Q4 and fiscal 2027, focusing on Taco Bell's recovery.