Yum! Brands income falls by 25% to $300m in Q1
KFC Division performed best, with 385 new opening worldwide and a 4% system sales increase to $8m (£7.2m)
Yum! Brands, which operates restaurant chains KFC, Taco Bell, Pizza Hut and Habit Burger Grill, has announced that net income fell by 25% to $300m (£238m) in Q1, down from $399m (£316m) the prior year.
Despite this, revenues for the brand rose by 6% to $1.6bn (£1.4bn) in the first quarter of 2023.
The group also reported a 13% increase in worldwide system sales, while digital sales for the brand were nearly $7bn (£6.3bn), with digital mix exceeding 45%.
Q1 operating profit grew 11%, including a 1% point headwind from Russia despite leaving the Russian market in April 2023 by selling its KFC business in Russia to Smart Service Ltd.
KFC Division opened 385 new restaurants in 47 countries and reported a 4% system sales increase to $8m (£7.2m). In the United Kingdom alone, system sales increased by 7%. Operating profit was $305m (£276m).
Taco Bell opened 79 new restaurants in 16 countries. U.S. system sales grew 11% to $3.4m (£3m) and Taco Bell International system sales excluding foreign currency grew 25%. Operating profit was $204m (£185m).
Pizza Hut division opened 271 new restaurants in 31 countries and reported a 6% increase in system sales to $3.3m (£2.9m). Operating profit was $104m (£94m).
The Habit Burger Grill division opened 11 new restaurants in the US and Cambodia and reported an 8% increase in system sales.
David Gibbs, CEO, said: “Our first-quarter results continue to illustrate the power of our global portfolio and the advantages of our business model. The demand for our iconic brands is evident as our incredible teams and franchise partners delivered another strong quarter with system sales growth of 13% excluding Russia, driven by 8% same-store sales growth and continued development momentum.
“We’re seeing broad-based accelerating digital sales growth leading to a record quarter for both digital system sales of nearly $7bn and digital sales mix that exceeded 45%. I’m pleased to see the revenue flow through in the quarter translate to 11% core operating profit growth. We’re proud of the strong start to the year and confident we’ll continue to build on our position as the global franchisor of choice.”
