Yum (YUM) Down 1.5% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Yum Brands (YUM). Shares have lost about 1.5% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Yum due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

YUM! Brands Q4 Earnings Fall Short, Revenues Surpass Estimates

YUM! Brands, 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.

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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Yum has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Yum has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Yum belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Starbucks (SBUX), has gained 2.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Starbucks reported revenues of $9.92 billion in the last reported quarter, representing a year-over-year change of +5.5%. EPS of $0.56 for the same period compares with $0.69 a year ago.

Starbucks is expected to post earnings of $0.42 per share for the current quarter, representing a year-over-year change of +2.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.4%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Starbucks. Also, the stock has a VGM Score of C.

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

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