Yum! Brands (NYSE:YUM) shares dropped after reporting third-quarter revenue that fell short of analysts' expectations thanks to weak same-store sales growth at its franchise Pizza Hut.
Yum Brands, which also owns fast food restaurants KFC and Taco Bell, saw earnings per share of $1.44 adjusted, higher than the $1.28 expected by Wall Street analysts. However, revenue for the quarter came in at $1.71 billion, falling short of the estimated $1.77 billion.
The company's same-store sales grew 6% in the quarter, with Taco Bell's US locations and KFC's international restaurants driving the positive performance.
However, Pizza Hut sales in the US remained flat, while international sales managed to increase by 1%.
Yum CEO David Gibbs remained optimistic, despite the Pizza Hut setback, stating that the company still expects to outperform its long-term growth algorithm, which includes 5% unit growth, 7% system sales growth, and 8% operating profit growth.
Shares of Yum fell in early trading Wednesday before rebounding nearly 1% by midmorning to trade at $121.91.