YUM Gears Up for Q3 Earnings: What's in Store for the Stock?

YUM! Brands, Inc. YUM is scheduled to report third-quarter 2025 results on Nov. 4, before the opening bell. In the last reported quarter, the company’s bottom line missed the Zacks Consensus Estimate by 0.7%.

YUM’s Q3 Estimates

The Zacks Consensus Estimate for earnings per share is pinned at $1.47, representing a 7.3% increase from the prior-year quarter. In the past 30 days, the consensus estimate for current-quarter earnings has increased a penny. The Zacks Consensus Estimate for revenues is pegged at $1.96 billion, representing a 7.4% increase from $1.83 billion in the prior-year quarter.

Factors to Note Ahead of YUM’s Q3 Results

Yum! Brands’ top-line performance in the third quarter is likely to have been driven by robust system sales growth, supported by new unit development and sustained same-store sales expansion across its major brands. 

The company’s aggressive store openings, particularly KFC’s expansion in high-growth markets like China, India and Japan, along with Pizza Hut’s momentum in the United States and South Asia, have continued to bolster overall revenues. Additionally, digital transformation remained a powerful revenue catalyst. 

The global rollout of the Byte platform and rising digital sales mix, which reached record levels, have enhanced customer engagement and transaction frequency. AI-driven marketing personalization and loyalty activations at Taco Bell are likely to have contributed to traffic gains and higher check sizes. Innovations such as Taco Bell’s crispy chicken offerings, Refrescas beverage line and new menu items across KFC and Pizza Hut are also expected to have fueled strong consumer response and incremental sales.

Furthermore, the brand’s diversified geographic footprint and portfolio mix are expected to have provided resilience in a challenging consumer environment. KFC’s strength in international markets, Taco Bell’s share gains in the United States and Pizza Hut’s ongoing international recovery have collectively underpinned steady system-wide sales. YUM’s deepening digital and AI capabilities, spanning operations, marketing and customer insights, continued to streamline experiences and attract repeat visits, providing another layer of top-line stability.

Our model predicts same-store sales to demonstrate growth of 2.2% year over year in the to-be-reported quarter.

In third-quarter 2025, our model estimates KFC, Taco Bell and Habit Burger revenues to increase 10.4%, 4.4% and 4.8%, respectively, from the year-ago levels to $866.6 million, $695.1 million and $143.6 million. Moreover, we expect Pizza Hut revenues to increase 1% from the prior-year levels to $240.4 million.

YUM’s bottom-line growth in the quarter is likely to have been supported by strong company-owned store profitability and operating efficiency initiatives. The company saw improving margins in its recently acquired U.K. KFC stores and higher restaurant-level margins at Taco Bell, which targeted 24-25% for the year.

What the Zacks Model Unveils About YUM

Our proven model does not conclusively predict an earnings beat for Yum! Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

YUM’s Earnings ESP: Yum! Brands has an Earnings ESP (difference between the Most Accurate Estimate and the Zacks Consensus Estimate) of -0.49%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. 

YUM’s Zacks Rank: Yum! Brands currently carries a Zacks Rank #3.

Stocks With the Favorable Combination

Here are some stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.
 
Dutch Bros Inc. BROS currently has an Earnings ESP of +6.93% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the to-be-reported quarter, Dutch Bros’ earnings are expected to increase 6.3%. Dutch Bros’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 91.9%.
 
Somnigroup International Inc. SGI currently has an Earnings ESP of +1.53% and a Zacks Rank of 2. 

In the to-be-reported quarter, Somnigroup International’s earnings are expected to register a 3.7% year-over-year surge. Somnigroup International’s earnings surpassed estimates in each of the trailing four quarters, with an average beat of 3.7%.
 
Darden Restaurants, Inc. DRI has an Earnings ESP of +4.64% and a Zacks Rank of 3 at present.

In the to-be-reported quarter, Darden’s earnings are expected to register a 3.5% year-over-year increase. Darden’s earnings beat estimates in one out of the trailing four quarters and missed thrice, with an average miss of 0.54%.

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This article originally published on Zacks Investment Research (zacks.com).

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