Yum! Brands Reports Fourth-Quarter and Full-Year Results
Industry Record Full-Year 4,754 Gross Unit Openings Translating to 6% Unit Growth
Full-Year System Sales Grew 10% with 22% Digital Sales Growth
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SUMMARY FINANCIAL TABLE
|
Fourth-Quarter |
Full-Year |
||||
|
2023 |
2022 |
% Change |
2023 |
2022 |
% Change |
GAAP EPS |
|
|
+26 |
|
|
+23 |
Special Items EPS1 |
|
|
NM |
|
|
NM |
EPS Excluding Special Items |
|
|
(5) |
|
|
+14 |
1 See reconciliation of Non-GAAP Measurements to GAAP Results in our Consolidated Summary of Results for further detail of Special Items. |
|
All comparisons are versus the same period a year ago. |
|
System sales growth figures exclude foreign currency translation ("F/X") and core operating profit growth figures exclude F/X and Special Items. Special Items are not allocated to any segment and therefore only impact worldwide GAAP results. See reconciliation of Non-GAAP Measurements to GAAP Results in our Consolidated Summary of Results for further details. |
|
Digital system sales includes all transactions where consumers at system restaurants utilize ordering interaction that is primarily facilitated by automated technology. |
FOURTH-QUARTER HIGHLIGHTS
-
Worldwide system sales grew 5% excluding foreign currency translation, with
KFC at 7%,Taco Bell at 6%, andPizza Hut at 1%. - We opened 1,853 gross units during the fourth quarter.
- Restaurant level margins were 17.4%, up 180 basis points year-over-year.
-
Ex-special EPS was
$1.26 , lower year-over-year driven by a$0.23 headwind from fluctuations in our quarterly tax rate that resulted in our quarterly effective rate being above our guided range in 2023 and below our guided range in 2022.
|
% Change |
||||
|
System Sales
|
Same-Store Sales |
Units |
GAAP
|
Core
|
KFC Division |
+7 |
+2 |
+8 |
+6 |
+7 |
|
+6 |
+3 |
+4 |
+16 |
+16 |
|
+1 |
(2) |
+4 |
(1) |
(2) |
Worldwide |
+5 |
+1 |
+6 |
+5 |
+8 |
FULL-YEAR HIGHLIGHTS
-
Worldwide system sales grew 10% excluding foreign currency translation, with
KFC at 12%,Taco Bell at 9%, andPizza Hut at 5%. - We opened a record 4,754 gross units during the year.
- Digital sales increased 22% year-over-year, with digital mix exceeding 45%.
- Restaurant level margins were 17.2%, up 140 basis points year-over-year.
-
Foreign currency translation unfavorably impacted divisional operating profit by
$49 million .
|
% Change |
||||
|
System Sales
|
Same-Store Sales |
Units |
GAAP
|
Core
|
KFC Division |
+12 |
+7 |
+8 |
+9 |
+12 |
|
+9 |
+5 |
+4 |
+11 |
+11 |
|
+5 |
+2 |
+4 |
+1 |
+3 |
Worldwide |
+10 |
+6 |
+6 |
+6 |
+12 |
1See reconciliation of Non-GAAP Measurements to GAAP Results in our Consolidated Summary of Results for further detail of Core Operating Profit. |
KFC DIVISION
|
Fourth-Quarter |
Full-Year |
||||||
|
|
|
%/ppts Change |
|
|
%/ppts Change |
||
|
2023 |
2022 |
Reported |
Ex F/X |
2023 |
2022 |
Reported |
Ex F/X |
Restaurants |
29,900 |
27,760 |
+8 |
NA |
29,900 |
27,760 |
+8 |
NA |
System Sales ($MM) |
8,888 |
8,307 |
+7 |
+7 |
33,863 |
31,116 |
+9 |
+12 |
Same-Store Sales Growth (%) |
+2 |
+5 |
NM |
NM |
+7 |
+4 |
NM |
NM |
Franchise & Property Revenues ($MM) |
444 |
450 |
(1) |
(2) |
1,698 |
1,645 |
+3 |
+6 |
Operating Profit ($MM) |
329 |
310 |
+6 |
+7 |
1,304 |
1,198 |
+9 |
+12 |
Operating Margin (%) |
43.3 |
39.0 |
4.3 |
4.6 |
46.1 |
42.3 |
3.8 |
4.2 |
|
Fourth-Quarter (% Change) |
Full-Year (% Change) |
||
|
International |
|
International |
|
System Sales Growth Ex F/X |
+9 |
Even |
+14 |
+2 |
Same-Store Sales Growth |
+2 |
Even |
+8 |
+2 |
-
KFC Division opened 1,067 gross new restaurants during the quarter.
- For the year, KFC Division opened 2,716 gross new restaurants in 97 countries.
-
Foreign currency translation unfavorably impacted operating profit by
$1 million for the quarter and$41 million for the year.
KFC Markets1 |
Percent of |
System Sales Growth Ex F/X |
|
Fourth-Quarter
|
Full-Year
|
||
|
27% |
+18 |
+20 |
|
15% |
Even |
+2 |
|
11% |
+9 |
+17 |
|
10% |
(2) |
+8 |
|
7% |
+6 |
+9 |
|
7% |
+16 |
+17 |
|
6% |
+2 |
+6 |
|
6% |
(5) |
+21 |
|
5% |
+13 |
+15 |
|
2% |
+13 |
+13 |
|
2% |
+6 |
+7 |
|
2% |
+14 |
+19 |
1Refer to investors.yum.com/financial-information/financial-reports/ for a list of the countries within each of the markets. |
2Reflects Full Year 2023. |
|
Fourth-Quarter |
Full-Year |
||||||
|
|
|
%/ppts Change |
|
|
%/ppts Change |
||
|
2023 |
2022 |
Reported |
Ex F/X |
2023 |
2022 |
Reported |
Ex F/X |
Restaurants |
8,564 |
8,218 |
+4 |
NA |
8,564 |
8,218 |
+4 |
NA |
System Sales ($MM) |
4,887 |
4,619 |
+6 |
+6 |
15,915 |
14,653 |
+9 |
+9 |
Same-Store Sales Growth (%) |
+3 |
+11 |
NM |
NM |
+5 |
+8 |
NM |
NM |
Franchise & Property Revenues ($MM) |
281 |
263 |
+7 |
+6 |
918 |
837 |
+10 |
+10 |
Operating Profit ($MM) |
286 |
246 |
+16 |
+16 |
944 |
850 |
+11 |
+11 |
Operating Margin (%) |
34.9 |
32.1 |
2.8 |
2.8 |
35.8 |
34.9 |
0.9 |
0.9 |
-
Taco Bell Division opened 201 gross new restaurants during the quarter.-
For the year,
Taco Bell Division opened 417 gross new restaurants in 25 countries.
-
For the year,
-
Taco Bell U.S. system sales grew 6% andTaco Bell International system sales grew 7% for the quarter.-
For the year,
Taco Bell U.S. system sales grew 8% andTaco Bell International system sales grew 16%.
-
For the year,
-
Taco Bell U.S. same-store sales grew 3% andTaco Bell International same-store sales declined 2% for the quarter.-
For the year,
Taco Bell U.S. same-store sales grew 6% andTaco Bell International same-store sales grew 1%.
-
For the year,
-
Company-owned restaurant margins were approximately 23% for the quarter, flat year-over-year.
- For the year, company-owned restaurant margins were approximately 24%, flat year-over-year.
|
Fourth-Quarter |
Full-Year |
||||||
|
|
|
%/ppts Change |
|
|
%/ppts Change |
||
|
2023 |
2022 |
Reported |
Ex F/X |
2023 |
2022 |
Reported |
Ex F/X |
Restaurants |
19,866 |
19,034 |
+4 |
NA |
19,866 |
19,034 |
+4 |
NA |
System Sales ($MM) |
3,535 |
3,508 |
+1 |
+1 |
13,315 |
12,853 |
+4 |
+5 |
Same-Store Sales Growth (%) |
(2) |
+1 |
NM |
NM |
+2 |
Even |
NM |
NM |
Franchise & Property Revenues ($MM) |
168 |
169 |
Even |
(1) |
622 |
607 |
+3 |
+4 |
Operating Profit ($MM) |
99 |
100 |
(1) |
(2) |
391 |
387 |
+1 |
+3 |
Operating Margin (%) |
35.0 |
34.5 |
0.5 |
0.4 |
38.3 |
38.5 |
(0.2) |
0.3 |
|
Fourth-Quarter (% Change) |
Full-Year (% Change) |
||
|
International |
|
International |
|
System Sales Growth Ex F/X |
+4 |
(3) |
+8 |
+2 |
Same-Store Sales Growth |
Even |
(4) |
+3 |
+1 |
-
Pizza Hut Division opened 575 gross new restaurants during the quarter.-
For the year,
Pizza Hut Division opened 1,586 gross new restaurants in 73 countries.
-
For the year,
-
Foreign currency translation favorably impacted operating profit by
$1 million for the quarter and unfavorably impacted operating profit$8 million for the year.
|
Percent of |
System Sales Growth Ex F/X |
|
Fourth-Quarter
|
Full-Year
|
||
|
41% |
(3) |
+2 |
|
18% |
+25 |
+22 |
|
13% |
(4) |
+1 |
|
12% |
(3) |
Even |
|
6% |
(2) |
+2 |
|
5% |
(3) |
+11 |
|
3% |
+8 |
+8 |
|
2% |
(1) |
+6 |
1Refer to investors.yum.com/financial-information/financial-reports/ for a list of the countries within each of the markets. Note that during the first quarter of 2023 |
2Reflects Full Year 2023. |
-
The Habit Burger Grill Division grew system sales 2% for the quarter and 6% for the year. -
The Habit Burger Grill Division same-store sales declined 5% for the quarter and 3% for the year. -
The Habit Burger Grill Division opened 10 gross new restaurants during the quarter.-
For the year,
The Habit Burger Grill Division opened 35 gross new restaurants.
-
For the year,
OTHER ITEMS
-
During the quarter the Company paid off a
$325 million debt maturity with no further significant debt maturities in 2024 or 2025. Our net leverage ratio ended the quarter at 4.2x. -
On
December 6th , the Company announced the acquisition of 218KFC restaurants in theU.K. andIreland . The transaction will be funded from the Company’s cash on hand and is expected to have an immaterial impact on the Company’s 2024 EPS. We expect the transaction to close in the second quarter. -
In
January 2024 the Company's Board of Directors approved a$0.67 quarterly dividend, an increase of 11%. - See reconciliation of Non-GAAP Measurements to GAAP results within this release for further detail of Special Items by financial statement line item including the impact of Special Items on General and administrative expenses.
-
Disclosures pertaining to outstanding debt in our
Restricted Group capital structure will be provided at the time of the filing of the 2023 Form 10-K.
CONFERENCE CALL
The call will be available for playback beginning at
The webcast and the playback can be accessed via the website by visiting
ADDITIONAL INFORMATION ONLINE
Quarter end dates for each division, restaurant count details, definitions of terms and
FORWARD-LOOKING STATEMENTS
This announcement may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as “expect,” “expectation,” “believe,” “anticipate,” “may,” “could,” “intend,” “belief,” “plan,” “estimate,” “target,” “predict,” “likely,” “seek,” “project,” “model,” “ongoing,” “will,” “should,” “forecast,” “outlook” or similar terminology. These statements are based on and reflect our current expectations, estimates, assumptions and/ or projections, our perception of historical trends and current conditions, as well as other factors that we believe are appropriate and reasonable under the circumstances. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause our actual results to differ materially from those indicated by those statements. There can be no assurance that our expectations, estimates, assumptions and/or projections, including with respect to the future earnings and performance or capital structure of
Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: food safety and food- or beverage-borne illness concerns; adverse impacts of deterioration in public health conditions associated with COVID-19, or the occurrence of other catastrophic or unforeseen events; the success of our concepts’ franchisees; the success of our development strategy; anticipated benefits from past or potential future acquisitions, investments or other strategic transactions, or our portfolio business model; our significant exposure to the Chinese market; our global operations and related exposure to geopolitical instability; foreign currency risks and foreign exchange controls; our ability to protect the integrity or availability of IT systems or the security of confidential information and other cybersecurity risks; compliance with data privacy and data protection legal requirements; our ability to successfully implement technology initiatives; our increasing dependence on digital commerce platforms; the impact of social media; our ability to protect our trademarks or other intellectual property; shortages or interruptions in the availability and the delivery of food, equipment and other supplies; the loss of key personnel, labor shortages and increased labor costs, including as a result of state and local legislation related to wages and working conditions, such as AB1228 in
The forward-looking statements included in this announcement are only made as of the date of this announcement and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances. You should consult our filings with the
Category: Earnings
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