KFC's Global Strength: Is it a Key Growth Lever for Yum! Brands?

KFC is proving to be a crucial driver of Yum! Brands, Inc.’s YUM global growth, with its international operations delivering standout results in first-quarter 2025.

The brand accounted for more than half of Yum!’s divisional operating profit, fueled by 6% unit growth and a 2% increase in same-store sales. KFC International’s success is more than just scale, it is a story of innovation, localization and brand agility across more than 50 countries.

From Canada to Korea, markets are responding positively to localized menu innovations, such as the Zinger Nachos in Australia, the Double Down Zinger in the United Kingdom and the Crispy Naan in France. Strategic value offerings, such as Canada’s $5 price points and Korea’s expanded snacking options, are translating into real traction. The prime examples are 13% same-store sales growth in Korea and 8% in Africa.

Notably, KFC achieved 524 gross openings globally this quarter, demonstrating Yum!’s ability to tap into white space with fast paybacks, especially in high-growth regions like China, India and the Middle East. Early wins with new initiatives, such as “Quench by KFC”, a specialty beverage concept, demonstrate the brand’s ability to evolve with changing consumer preferences.

What sets KFC apart is the consistency of performance even amid geopolitical uncertainty. Yum!’s leadership emphasized that despite challenges in some regions, there is no significant anti-American consumer sentiment affecting performance. Brand perception and value scores are improving across key markets.

As Yum! looks to sustain 8% operating profit growth this year, KFC International’s expanding footprint and resilient demand act as a core pillar of its long-term earnings power.

How Others Stack Up Against KFC’s Momentum

While Yum!’s KFC International continues to thrive, two major competitors, Restaurant Brands International QSR and McDonald’s Corporation MCD, are vying for dominance in global quick-service markets.

Restaurant Brands International, the parent of Popeyes and Burger King, has been accelerating international growth, especially for Popeyes in regions like India and Southeast Asia. Though still smaller in scale compared with KFC, Popeyes is capitalizing on its unique fried chicken offerings and brand freshness to attract new consumers. However, its unit growth and market depth lag KFC’s well-established franchise network.

Meanwhile, McDonald’s leverages a deeply entrenched global presence and a strong digital ecosystem. It continues to invest in market-specific menu innovation and digital experiences. Yet, KFC’s strategy of bold value promotions and localized innovation, such as Crispy Naan sandwiches in France or Korean snack offerings, gives it a nimbleness McDonald’s sometimes lacks.

As KFC expands rapidly, both rivals are racing to match its international appeal and operational agility.

YUM’s Price Performance, Valuation & Estimates

YUM shares have gained 17.7% in the past six months compared with the industry’s growth of 3.5%.

Price Performance

Despite the recent gain, YUM is priced at a discount relative to its industry. It has a forward 12-month price-to-earnings ratio of 23.74, which is well below the industry average.

P/E (F12M)

The Zacks Consensus Estimate for 2025 and 2026 earnings per share has been unchanged in the past 30 days.

The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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