Yum! Brands, Inc. (NYSE:YUM) stock traded flat after posting mixed quarterly results, with earnings coming in shy of expectations despite higher revenue.
Strength at Taco Bell and KFC supported systemwide growth and unit expansion, while restaurant margins softened year over year.
Quarterly Metrics
The company reported fourth-quarter adjusted earnings per share of $1.73, missing the analyst consensus estimate of $1.77. Quarterly sales of $2.514 billion outpaced the Street view of $2.451 billion.
Worldwide system sales rose 5% excluding currency impacts and the extra 53rd week comparison. Growth was led by Taco Bell, up 8%, and KFC, up 6%.
Operating profit in the quarter under review was $738 million, higher than $657 million a year ago. Company restaurant margin in the fourth quarter was 16%, lower than 17.9% a year ago.
The company said it opened 1,814 gross new units, driving year-over-year unit growth of 3%, while digital system sales surpassed $11 billion and accounted for nearly 60% of total sales.
KFC Division opened 1,132 gross new restaurants during the quarter, while Taco Bell Division opened 228 gross new restaurants during the quarter.
Yum! Brands exited the quarter with cash and equivalents worth $709 million.
Management Commentary
“We sustained strong topline results, delivered double-digit profit growth, completed a sizeable Taco Bell store acquisition and commenced a review of strategic options for the Pizza Hut brand. We have momentum entering 2026, an ambitious strategic agenda and are highly energized by the growth opportunities ahead,” CFO Ranjith Roy said.
Dividend
The company approved a dividend of 75 cents per share of common stock, an increase of 6%. The quarterly dividend will be distributed on March 6.
Long-term Outlook
Yum! Brands reaffirmed its long-term growth algorithm, targeting 5% unit growth and 7% system sales growth, excluding foreign exchange.
The company also aims for at least 8% core operating profit growth over time, on average.
YUM Price Action: Yum Brands shares were down 0.09% at $158.60 at the time of publication on Wednesday, according to Benzinga Pro data.
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