Yum! Brands: Reports Encouraging Q3-2020 Results

Louisville / KY. (yb) Yum! Brands Inc. reported results for the third-quarter ended September 30, 2020. Worldwide system sales excluding foreign currency translation grew 1 percent, with 2 percent net-new unit growth and a (2) percent same-store sales decline. Third-quarter GAAP EPS was USD 0.92, an increase of 14 percent over the prior year quarter. Third-quarter EPS excluding Special Items was USD 1.01, an increase of 27 percent over the prior year quarter.

Commentary

David Gibbs, CEO, said, «Third-quarter results were encouraging, demonstrating the resilience of the Yum! portfolio as Yum! generated year-over-year core operating profit growth, continued to reopen temporarily closed restaurants and achieved global same-store sales growth of approximately flat, in aggregate, for our open store base. For the second consecutive quarter, digital sales increased by more than USD 1 billion over the prior year and set a single quarter record of USD 4 billion. These results are a testament to the hard work and collaboration across our four brands, and I want to thank our entire global system for exceptional execution of our Recipe for Growth and Good strategy this quarter. Our employees, franchisees and restaurant team members continued to adapt to this year’s ever-changing environment while also accelerating progress on our digital and technology journey. Importantly, our balance sheet and liquidity position are strong and franchisee health improved. I’m confident that by continuing to leverage our unmatched scale and champion the technology-centric customer experience, we will drive global growth, enhance unit-level economics and maximize long-term value for all of our stakeholders.»

Third Quarter Highlights

• Worldwide system sales excluding foreign currency translation grew 1 percent, with Taco Bell at 5 percent, offset by KFC at (1) percent and Pizza Hut at (4) percent.
• We reported 2 percent net unit growth year-over-year and a unit decline of (267) during the quarter.
• We recorded USD 8 million of pre-tax investment income related to the change in fair value of our investment in Grubhub, which resulted in a USD 0.02 benefit to EPS on the third-quarter. Our Grubhub investment favorably impacted year-over-year EPS growth by USD 0.17, as we lapped a USD 60 million of pre-tax investment expense in the third-quarter of 2019 for a (USD 0.15) impact to EPS. We disposed our Grubhub investment during the third-quarter for USD 206 million.
• Foreign currency translation unfavorably impacted divisional operating profit by USD 2 million.

For additional information please read the company’s PDF file below (206 KB):

20201031-YUM-Q3-2020.