Yum Brands posted Q2 earnings, beats analyst forecasts

Yum Brands announced quarterly earnings and revenue that were above analyst expectations on Thursday, as sales at its three major brands beat pre-pandemic levels, and the company launched new restaurants at a record rate.

The firm recorded a net income of $391 million, or $1.29 per share, for the quarter, up from $206 million, or 67 cents per share, a year ago.

Yum earned $1.16 per share after excluding refranchising profits and other items, above the 96 cents per share predicted by Refinitiv analysts polled.

To keep consumers coming back even when full-service competitors reopen, major U.S. fast-food restaurants, including Yum's franchises, McDonald's, and Starbucks have been investing in their loyalty programs and releasing new dishes.

The company's revenue increased by 34% year on year to $1.6 billion, above the projected revenue of $1.48 billion. In the third quarter, global same-store sales grew by 23%. Yum's same-store sales increased 4% year over year, although 1% of its restaurants were closed due to the pandemic at the end of the quarter, according to CEO David Gibbs, CNBC reported.

Digital sales increased 35 percent to more than $5 billion in the second quarter ended June 30, according to Chief Executive Officer David Gibbs, who told investors that all of Yum's franchises "are very fast becoming digital brands."

Taco Bell U.S. established a rewards program last year, which has helped the brand's digital sales rise.

Yum has introduced a new chicken sandwich, Detroit-style pizza, and menu items produced with Beyond Meat's plant-based protein, in addition to purchasing technology businesses such as Tictuk Tech to grow digitally.

The business has moderately increased product pricing across its U.S. brands to counteract increasing material prices and salaries. According to Gibbs, the firm is seeing stronger inflationary pressures in the United States than in its overseas markets.