Aug 6 (Reuters) -

Taco Bell parent Yum Brands ( YUM ) reported a

bigger-than-expected fall in same-store sales for the second

quarter as sticky inflation prompted lower-income Americans to

eat out less and cook more affordable meals at home.

Like its peers in the fast-food industry, Yum has been

investing in loyalty programs and refreshing its menus in an

attempt to appeal to budget-conscious consumers, but stiff

competition for value meals and promotions has dogged its KFC ( YUM )

business in the U.S. this year.

Same-store sales at the U.S. KFC ( YUM ) division fell 5%, compared

with a 7% decline in the prior quarter.

Yum's sales weakness this quarter echoes results from other

restaurant majors such as Domino's, McDonald's

and Starbucks ( SBUX ).

Still, fresh menu items such as the Cantina Chicken and the

popular Taco Tuesday promotional event helped drive growth in

comparable sales at Yum's key Taco Bell division to 5%, ahead of

expectations of 3.6%, according to LSEG data.

This helped Yum narrow its quarterly overall same-store

sales decline to 1%, from 3% in the preceding quarter. However,

that was wider than market expectations for a decline of 0.2%.

The company is also investing in improving service times and

the digital experience at its stores and drive-thrus with the

addition of kiosks and artificial intelligence-based

technologies.

Excluding items, Yum Brands ( YUM ) reported a profit of $1.35 per

share for the quarter ended June 30, edging past estimates of

$1.33.

"I'm incredibly pleased with how well our teams have managed

through a challenging operating environment to deliver a 10%

increase in core operating profit," said CEO David Gibbs.

Shares of Yum Brands ( YUM ) were marginally higher in premarket

trading.

The company also reaffirmed its full-year core profit

growth expectations of 8%.

(Reporting by Juveria Tabassum; Editing by Devika Syamnath)