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Yum! Brands Q3 Financial Results

 11/03/2022

In a November 3rd release, Yum! Brands Inc. (YUM) posted financial results for the 3rd quarter of fiscal 2022. Along with other QSRs and casual dining competitors, all are subject to the pressures of increased costs for food, packaging and labor in a competitive environment restrained by the hangover of COVID and inflation impacting consumers.

 

For the 3rd Quarter ending September 30th, net income was $331 million on total revenue of $1,640 million.  Comparable figures for the 3rd quarter of fiscal 2021 ending September 30th were net income of $528* million on total revenue of $1,606 million. Diluted EPS fell from $1.75 for the 3rd quarter of fiscal 2021 to $1.14 for the most recent quarter.

*Includes $77 million tax benefit

 

In comparing Q3 of 2022 with Q3 of 2021, revenue increased by 2.1 percent: operating margin by 3.6 percent but net profit declined by 37.3 percent

 

For the quarter, system-wide sales increased by 7.0 percent compared to Q3 of FY 2021 exclusive of foreign exchange and Russia. KFC +8 percent; Taco Bell 9 percent and Pizza Hut 4 percent

 Segment results for Q3 2022 comprised:-

  • KFC Division: System sales, $7,824 million. Segment revenue, $704 million; Operating margin 43.4%; Operating profit $304 million; 26,872 units. Same store sales growth: International, 8%; U.S. 2%.
  • Pizza Hut Division: System sales, $3,146 million. Segment revenue $237 million; Operating margin 39.0%; Operating profit $92 million; 18,807 units. Same store sales growth: International, 2%; U.S. 1%.
  • Taco Bell Division: System sales $3,417 million. Segment revenue, $568 million; Operating margin 35.9%; Operating profit $204 million; 7,974 units.  Same store sales growth: International, 5%; U.S. 7%.

 

In commenting on Q3 results, David Gibbs, CEO, stated “I’m pleased to report another strong quarter for Yum! with system sales growth of 10% excluding Russia, driven by strong demand for our iconic brands, increased digital adoption and continued momentum on unit development. Our three global brands delivered widespread system sales growth, once again demonstrating that our globally diversified business, led by our world-class teams and franchisees, can thrive in any environment.”

 

On September 30th 2022, YUM posted assets of $5,779 million of which $974 million comprised goodwill, lease obligations and intangibles.  Long-term debt was $11,517 million The Company had an intraday market capitalization of $33,540 million on November 3rd. QSR trades with a forward P/E of 22.6 and has ranged over a 52-week period from $103.97 to $139.85 with a 50-day moving average of $112.06.  Twelve-month trailing operating margin was 31.0 percent and profit margin 22.2 percent.  Return on assets over the trailing twelve months was 22.7 percent