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KFC parent Yum Brands reports surprise drop in global same-store sales on weak demand
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KFC parent Yum Brands reports surprise drop in global same-store sales on weak demand
May 1, 2024 4:38 AM

May 1 (Reuters) - Yum Brands ( YUM ) reported a fall in

quarterly global same-store sales on Wednesday, hurt by choppy

demand for its KFC ( YUM ) and Pizza Hut brands from inflation-weary

consumers in the United States as well as in overseas markets.

Consumers in the United States are increasingly looking for

value-oriented meals in the face of sticky inflation, pushing

fast food chains to double down on promotions and offers and on

revamping their store and order experiences.

Yum Brands ( YUM ) joined coffee giant Starbucks ( SBUX ) in

recording its first drop in total same-store sales in about

three years.

"As expected, same-store sales were pressured this quarter,

but we are encouraged by strong two-year same-store sales growth

and positive momentum exiting the quarter," said CEO David

Gibbs.

Yum Brands' ( YUM ) total revenue fell nearly 3% to $1.60 billion in

the first-quarter ended March 31, missing analysts' estimates of

$1.71 billion, as per LSEG data.

The company's worldwide same-store sales fell 3% in the

first-quarter, while analysts were expecting a growth of 0.04%.

The launch of KFC's ( YUM ) first-ever loyalty program in the

reported quarter failed to drum up demand for the fast food

giant, as consumers continued to look for cheaper alternatives,

including meals at home.

This comes in contrast to results at pizza chain Domino's

, which reaped benefits from a revamped loyalty program

that has kept consumers hooked over the last two quarters.

Global same-store sales at its KFC ( YUM ) restaurants fell 2%,

while that of Pizza Hut dropped 7%.

Taco Bell posted an increase of 1%, compared with estimates

of 2.83%.

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