Stock Track | Yum Brands Plummets 5% as Q2 Earnings Miss Estimates Amid Rising Costs

Stock Track
Aug 05

Yum Brands (YUM) stock plummeted 5% in intraday trading on Tuesday after the restaurant operator reported second-quarter earnings that fell short of analyst expectations. The company, which owns KFC, Pizza Hut, and Taco Bell, posted adjusted earnings per share of $1.44, missing the consensus estimate of $1.46.

The disappointing results were attributed to slower-than-expected sales growth and rising costs. Yum Brands reported worldwide same-store sales growth of 2% for the quarter, below analysts' projections of 2.37%. Total revenue came in at $1.93 billion, slightly under the forecasted $1.94 billion. The company's total costs and expenses surged 13% during the quarter, putting pressure on profit margins.

Investors were particularly concerned about the performance of Taco Bell, which accounts for 38% of Yum Brands' total revenue. Despite rolling out budget-friendly meal deals, Taco Bell's same-store sales growth in the U.S. slowed to 4% from 5% a year earlier. The company cited higher ingredient costs and muted consumer demand as key factors impacting its overall performance across its restaurant chains.

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