Yum Brands saw a decline in quarterly global same-store sales, attributed to fluctuating demand for its KFC and Pizza Hut brands among inflation-wary consumers both in the United States and abroad.
As inflation lingers, consumers across the United States are showing a growing preference for value-driven dining options. This trend is prompting fast food chains to intensify their efforts in offering promotions, revamping store layouts, and enhancing ordering experiences.
Yum Brands saw a 3.7% decline in premarket trading as the parent company of Pizza Hut experienced its first decrease in total same-store sales in approximately three years, following in the footsteps of coffee giant Starbucks.
CEO David Gibbs expressed, “As anticipated, same-store sales faced pressure this quarter. However, we find encouragement in robust two-year same-store sales growth and the positive momentum as we conclude the quarter.”
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According to LSEG data, Yum Brands’ total revenue for the first quarter ended March 31 decreased by nearly 3% to $1.60 billion, falling short of analysts’ estimates of $1.71 billion.
In the first quarter, the company experienced a 3% decline in worldwide same-store sales, contrary to analysts’ expectations of a 0.04% growth.
Despite the launch of KFC’s first loyalty program in the reported quarter, it didn’t succeed in boosting demand for the fast-food giant. Consumers persisted in seeking more economical options, such as meals prepared at home.
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In contrast to these results, pizza chain Domino’s has thrived, benefiting from a revamped loyalty program that has retained consumer loyalty over the past two quarters.
Same-store sales at KFC restaurants globally declined by 2%, while Pizza Hut experienced a 7% drop in the same metric.
Taco Bell’s posted a 1% increase, falling short of estimates by 1.83%.
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