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YUM! Brands, Inc. YUM reported third-quarter 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. Following the results, shares of the company gained 3.2% in the pre-market trading session today.
YUM announced the launch of a strategic review for its Pizza Hut brand aimed at maximizing long-term value for the company, its franchisees and partners. Also, it stated plans to complete the acquisition of 128 Taco Bell restaurants across the Southeast United States in the fourth quarter of 2025. The move is expected to strengthen its equity-owned restaurant base with high-margin assets, enhance EBITDA and operating profit and unlock new growth opportunities, reinforcing the company’s leadership within the U.S. system.
In third-quarter 2025, the company's adjusted earnings per share (EPS) were $1.58, beating the Zacks Consensus Estimate of $1.47. The metric increased 15% from the prior-year quarter.
Yum! Brands, Inc. price-consensus-eps-surprise-chart | Yum! Brands, Inc. Quote
Quarterly revenues of $1.98 billion beat the consensus mark of $1.96 billion. Moreover, the top line increased 8% year over year.
Worldwide system sales, excluding foreign currency translation, increased 5% year over year, with Taco Bell rising 9% and KFC increasing 6%. The metric declined 1% year over year at Pizza Hut.
YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
For third-quarter 2025, revenues from KFC totaled $879 million, up 12% from the prior-year quarter. Our model predicted the metric to increase 10.4% year over year. Comps in the division rose 3% against a decline of 4% reported in the prior-year quarter.
The segment's operating margin expanded 150 basis points (bps) year over year to 44.6%. In the quarter under review, the KFC Division opened 760 gross new restaurants across 60 countries.
At Pizza Hut, revenues amounted to $240 million, up 1% year over year. Our model predicted Pizza Hut revenues to increase 1% year over year. Comps in the quarter decreased 1% compared with a decline of 4% in the year-ago quarter.
The segment's operating margin contracted 320 bps year over year to 35.1%. The Pizza Hut Division opened 289 gross new restaurants.
Taco Bell's revenues were $730 million, up 10% from the year-ago quarter's levels. Our model predicted the metric to increase 4.4% year over year. Comps in the segment increased 7% compared with 4% growth reported in the prior-year quarter. Its operating margin contracted 100 bps year over year to 36.6%.
Taco Bell opened 74 gross new restaurants in the quarter under review.
In the third quarter, the Habit Burger Grill division’s revenues amounted to $134 million, compared with $137 million reported in the prior-year quarter. Our model predicted the metric to be $143.6 million. Comps in the division grew 1% year over year. In the quarter under review, the division opened eight gross new restaurants.
As of Sept. 30, 2025, cash and cash equivalents totaled $1.05 billion compared with $616 million at 2024-end. Long-term debt, as of Sept. 30, 2025, was $11.5 billion compared with $11.3 billion at 2024-end.
Yum! Brands reaffirmed its long-term growth algorithm, originally introduced in 2022, outlining sustained expansion targets over time. The company aims to deliver approximately 5% annual unit growth, drive around 7% yearly system sales growth (excluding foreign currency and the 53rd week), and achieve at least 8% annual growth in core operating profit.
YUM! Brands currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are El Pollo Loco Holdings, Inc. LOCO, Boot Barn Holdings, Inc. BOOT and Dutch Bros Inc. BROS.
El Pollo Loco currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
El Pollo Loco has declined 10.8% in the year-to-date period. The Zacks Consensus Estimate for El Pollo Loco’s 2025 sales and EPS indicate an increase of 4.3% and 1.1%, respectively, from the year-ago levels.
Boot Barn presently sports a Zacks Rank #1. The stock has gained 25.9% in the year-to-date period.
The Zacks Consensus Estimate for Boot Barn’s 2026 fiscal sales and EPS indicate an increase of 15.7% and 20.5%, respectively, from the year-ago levels.
Dutch Bros presently carries a Zacks Rank #2 (Buy). The stock has gained 4.5% in the year-to-date period.
The Zacks Consensus Estimate for BROS’ 2025 sales and EPS implies growth of 24.9% and 38.8%, respectively, from the year-ago levels.
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This article originally published on Zacks Investment Research (zacks.com).
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