YUM Brands reported a surprise fall in worldwide same-store sales on Tuesday (Nov 5) as its KFC chain grapples with sluggish demand in the US, as well as choppy international sales.
KFC’s same-store sales in the US tumbled 7 per cent, marking their third straight quarter of declines this year.
The drop came even as Yum in August launched US$5 offers on two new items under its “Taste of KFC” value menu, including eight-piece chicken nuggets pack as well as a chicken nugget meal bowl in addition to the two-piece drum and thigh meal.
The company was responding the ongoing “value wars” in the fast-food industry from peers such as McDonald’s and Burger King.
The chain, like many of its peers, has also contended with diners seeking deals and discounts when eating out to counter menu prices that remain high.
Yum’s Tex-Mex food chain Taco Bell, in contrast, remained a bright spot. US same-store sales rose 4 per cent, the 11th straight quarter of increase.
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The company’s worldwide comparable sales fell 2 per cent, compared with market expectations of a 0.23 per cent rise, as per data compiled by LSEG.
Yum’s shares were down about 1 per cent in premarket trading. They have risen 1.6 per cent so far this year.
In international markets, the Pizza Hut parent faced the protracted impact from boycotts related to Israel’s war in Gaza.
Sales impact from the conflict had surfaced in several other markets beyond Malaysia, Indonesia and the Middle East, executives had said in August.
Burger King parent Restaurant Brands International missed quarterly revenue expectations on Tuesday, while McDonald’s reported its biggest quarterly global sales drop in four years last week.
Excluding items, Yum earned US$1.37 per share in the third quarter ended Sep 30. Analysts on average were expecting a profit of US$1.41 per share. REUTERS
