YUM! Brands to Report Q1 Earnings: What's in the Offing?

YUM! Brands, Inc. YUM is scheduled to report first-quarter 2025 results on April 30, before the opening bell. In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by 1.9%.

Q1 Estimates for YUM

The Zacks Consensus Estimate for earnings per share is pegged at $1.29, indicating a gain of 12.2% from the prior-year quarter. In the past 30 days, the consensus estimate for current-quarter earnings has witnessed an upward revision of 0.8%. The Zacks Consensus Estimate for revenues is pegged at $2.32 billion, implying growth of 15.1% from $1.84 billion in the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Factors to Note Ahead of YUM’s Q1 Results

Yum! Brands’ results in the quarter to be reported are likely to be aided by higher same-store sales, ongoing expansion both in the United States and abroad, and continued menu innovation. A key driver of overall revenue growth is likely to have been the strong performance of its leading brand, KFC.

Additionally, YUM’s adoption of a recommended ordering system, enhanced by artificial intelligence and machine learning, is expected to have improved operational efficiency and elevated the customer experience. By utilizing data analytics and AI-driven insights, the company seeks to personalize the ordering process, increase customer satisfaction and boost incremental sales. 

Our model predicts that the company’s same-store sales will demonstrate growth of 1.6% year over year in the to-be-reported quarter.

In first-quarter 2025, our model predicts KFC, Taco Bell and Habit Burger revenues to increase 15%, 10.2% and 15.8%, respectively, from the year-ago levels to $726.6 million, $658.8 million and $150.5 million. Moreover, we expect Pizza Hut revenues to increase 6.4% from the prior-year levels to $253.3 million.

An increase in the cost of employee wages, benefits and insurance, and other operating costs such as rent and energy costs, is expected to have put pressure on YUM’s margins. Our model predicts total costs and expenses to increase 14.2% from the year-earlier levels.

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 -0.29%. 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 Poised to Beat Earnings 

Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

CAVA Group, Inc. CAVA currently has an Earnings ESP of +0.87% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for first-quarter 2025 EPS is pegged at 14 cents, which implies a 16.7% increase year over year. The consensus estimate for CAVA’s quarterly revenues is pegged at $330.6 million, which indicates growth of 27.6% from the figure reported in the prior-year quarter. CAVA reported an earnings surprise of almost 62.6%, on average, in the trailing four quarters. 

Dutch Bros Inc. BROS has an Earnings ESP of +2.81% and a Zacks Rank of 3 at present. 

In the to-be-reported quarter, Dutch Bros earnings are expected to register an 11.1% year-over-year decrease. Dutch Bros earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 169.9%.

Deckers Outdoor Corporation DECK currently has an Earnings ESP of +8.32% and a Zacks Rank of 3.

In the to-be-reported quarter, Deckers’ earnings are expected to decrease 32.5%. Deckers’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 36.8%.

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

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