Key Highlights

  • EPS excluding special items of USD 1.56 beat the consensus estimate of USD 1.51, while GAAP EPS was USD 5.92.
  • Revenue of USD 2.054 billion rose 4% from a year earlier and topped the consensus estimate of USD 2.05 billion.
  • KFC Division operating profit rose 9% to USD 425 million, while Taco Bell Division same-store sales fell 4%.
  • The company closed the Pizza Hut sales and returned USD 1.8 billion via dividends and Buybacks year to date.

Yum! Brands, Inc. (NYSE:YUM) reported third quarter 2026 Revenue of USD 2.054 billion, up 4% from USD 1.979 billion a year earlier and slightly above the consensus estimate of USD 2.05 billion. EPS excluding special items was USD 1.56 against a consensus estimate of USD 1.51, though it was down from USD 1.58 in the prior year quarter. GAAP EPS reached USD 5.92 versus USD 1.41, and Net Income rose to USD 1.623 billion from USD 397 million.

The gap between the two EPS figures reflects special items worth USD 4.36 per share, chiefly a pre-tax gain of USD 1.683 billion on the Pizza Hut divestitures. The company closed the sale of the Pizza Hut Brand in mainland China to Yum China on August 7 and the sale of Pizza Hut outside mainland China to LongRange Capital on September 1. Chief Executive Officer Chris Turner said the company has entered its next chapter of growth, with a sharper focus on its Raise the B.A.R. priorities.

KFC Growth Offsets a Weaker Taco Bell Quarter

Excluding Pizza Hut, unit count grew 7% with 955 gross new units, and digital system sales topped USD 9 billion with a 64% digital mix. KFC Division system sales rose 8% to USD 10.046 billion, or 6% excluding currency, on same-store sales growth of 1%. KFC operating profit climbed 9% to USD 425 million and Operating Margin widened to 44.8% from 44.1%, even as company-owned restaurant margins fell 140 basis points to 12.3% because of 15 lower margin stores tested under the Saucy brand. KFC delivered record third quarter global gross unit development.

Taco Bell Division system sales fell 2% to USD 4.292 billion, same-store sales declined 4%, and operating profit dropped 5% to USD 255 million as margin narrowed to 33.1% from 36.6%. Within that, Taco Bell U.S. same-store sales fell 4%, while international system sales rose 14% excluding currency. Mr. Turner said Taco Bell U.S. has outpaced the industry on same-store sales growth since the end of September. Core operating profit excluding Pizza Hut grew 1% in the quarter and 6% year to date.

Long-Term Targets and Disclosed Risks

The company targets 5% unit growth, 7% system sales growth excluding currency and core operating profit growth of at least 8% over an extended period, on average, a framework first announced in 2022. It said it cannot forecast special items or currency effects and therefore gives no GAAP operating profit growth estimate. Among disclosed risks are the July 2026 cyclospora outbreak and its effect on sales and the pace of recovery, the financial health of franchisees, exposure to the Chinese market and the possibility that benefits from the Pizza Hut sale are not realized.

Cash, Debt and Shareholder Returns Against Year End 2025

Cash and equivalents stood at USD 2.108 billion on September 30 against USD 709 million at year end 2025, while short term borrowings rose to USD 2.141 billion from USD 38 million and Long Term Debt fell to USD 9.459 billion from USD 11.872 billion. Year to date share repurchases totaled USD 1.202 billion against USD 374 million a year earlier, and dividends paid were USD 616 million against USD 592 million. The quarterly Dividend declared was USD 0.75 per share versus USD 0.71. Net interest expense was USD 120 million against USD 124 million, and the Pizza Hut Division produced operating profit of USD 50 million against USD 84 million.