Yum Brands Inc., the owner of KFC and Taco Bell, reported a lower-than-expected rise in quarterly sales at established restaurants worldwide as fewer diners ate at its Pizza Hut chain.
Sales at restaurants open for at least one year rose 1 percent in the fourth quarter ended December 31, compared with a 2.1 percent rise analysts polled by Consensus Metrix had expected.
Same-store sales rose 3 percent at KFC and Taco Bell, but this was tempered by a 2-percent decline at Pizza Hut. “KFC and Taco Bell had relatively strong performance in December, despite difficult U.S. industry conditions,” Chief Financial Officer David Gibbs said.
U.S. restaurant chains have been struggling with competition from convenience stores, supermarkets and meal kit delivery services such as Blue Apron and Chefd. Minimum wage increases have also forced restaurants to raise menu prices while supermarkets have been able to pass on lower food costs to shoppers.
The latest-quarter results are Yum’s first since spinning off its China business in November. Yum’s income from continuing operations fell to $285 million in the quarter from $290 million a year earlier. Total revenue rose 2 percent to $2.02 billion. Analysts on average had estimated sales of $2.09 billion.
