YUM! Brands Q4 Earnings Fall Short, Revenues Surpass Estimates

YUM! Brands, Inc. YUM reported fourth-quarter 2025 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. However, both metrics increased year over year.

Chris Turner, CEO, highlighted that Yum! Brands capped off another strong year, led by impressive performances at KFC and Taco Bell. Taco Bell continued to outperform the market, posting exceptional same-store sales gains, while KFC achieved a new milestone in restaurant expansion, marking its best year ever for unit growth.

Turner noted that the company heads into 2026 with sharpened priorities centered on its long-term “Raise the Bar” strategy, aimed at sustaining growth across the portfolio. He added that YUM’s global reach, deep talent pool, strong culture and industry-leading franchise relationships together form a powerful competitive edge that positions it for continued success.

YUM’s Q4 Earnings & Revenue Discussion

In fourth-quarter 2025, the company's adjusted earnings per share (EPS) were $1.73, missing the Zacks Consensus Estimate of $1.78. However, the metric increased 8% from the prior-year quarter.

Quarterly revenues of $2.51 billion beat the consensus mark of $2.47 billion. Moreover, the top line increased 6% year over year.

Yum! Brands, Inc. Price, Consensus and EPS Surprise

Yum! Brands, Inc. price-consensus-eps-surprise-chart | Yum! Brands, Inc. Quote

Global system sales increased 5% on a constant-currency basis, excluding the impact of the 53rd week, with Taco Bell leading the growth at 8% and KFC close behind at 6%. The metric declined 2% year over year at Pizza Hut.

Divisional Performance of YUM in Q4

YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.

For fourth-quarter 2025, revenues from KFC totaled $1,041 million, up 8% from the prior-year quarter. Our model predicted the metric to increase 7.7% year over year. Comps in the division rose 3% flat year over year.

The segment's operating margin expanded 80 basis points (bps) year over year to 39.8%. In the quarter under review, the KFC Division opened 1,132 gross new restaurants.

At Pizza Hut, revenues amounted to $303 million, up 3% year over year. Our model predicted Pizza Hut revenues to decrease 9.3% year over year. Comps in the quarter decreased 1% compared with a decline of 1% in the year-ago quarter.

The segment's operating margin expanded 90 bps year over year to 33.3%. The Pizza Hut Division opened 443 gross new restaurants.

Taco Bell's revenues were $997 million, up 7% from the year-ago quarter's levels. Our model predicted the metric to decrease 1.7% year over year. Comps in the segment increased 7%, up from 5% growth reported in the prior-year quarter. Its operating margin contracted 50 bps year over year to 36%.

Taco Bell opened 228 gross new restaurants in the quarter under review.

In the fourth quarter, the Habit Burger Grill division’s revenues amounted to $175 million compared with $192 million reported in the prior-year quarter. Our model predicted the metric to be $195.1 million. Comps in the division grew flat year over year. In the quarter under review, the division opened 11 gross new restaurants.

Other Financial Details of YUM’s Q4 Earnings

As of Dec. 31, 2025, cash and cash equivalents totaled $709 million compared with $616 million at 2024-end. Long-term debt, as of Dec 31, 2025, was $11.9 billion compared with $11.3 billion at 2024-end.

YUM’s Long-Term Growth Targets

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’s Zacks Rank

YUM! Brands currently has a Zacks Rank #3 (Hold).

Stocks to Consider

BJ's Restaurants, Inc. BJRI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of BJ's Restaurants have gained 27.3% in the past six months. The Zacks Consensus Estimate for BJ's Restaurants' fiscal 2026 sales and EPS indicates a rise of 2.4% and 3.3%, respectively, year over year.

Brinker International, Inc. EAT presently carries a Zacks Rank #2. The stock has gained 3% in the past six months.

The Zacks Consensus Estimate for EAT’s 2026 sales and EPS implies growth of 8% and 18.7%, respectively, from the year-ago levels.

Yum China Holdings, Inc. YUMC presently carries a Zacks Rank #2. The stock has gained 16.4% in the past six months.

The Zacks Consensus Estimate for Yum China’s 2026 sales and EPS indicates an increase of 6.5% and 15.5%, respectively, from the year-ago levels.

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

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