Yum! Brands (NYSE:YUM) Inc has fallen short of revenue and earnings expectations with the release of its 1Q results revealing the impact of staffing shortages, supply chain issues, and inflation on the restaurant brand's franchises which include KFC, Taco Bell, and Pizza Hut.
For the quarter ending March 31, 2022, the company reported revenue of $1.55 billion, an improvement on $1.49 billion for the same period in 2021 but falling short of analyst expectations of $1.59 billion.
Net profits rose to $399 million or $1.36 per share in 1Q, up from $326 million or $1.07 per share for the same quarter in 2021.
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However, first quarter earnings per share excluding special items was $1.05, down from $1.07 for 1Q 2021 - failing to meet analyst expectations of $1.07.
Excluding foreign currency translation, the company reported a worldwide net increase in system sales of 8% but noted a 6% decline in Pizza Hut sales in the United States and a 4% decline in KFC sales in China.
Yum CEO David Gibbs said the company’s ability to grow its system sales 8% despite the difficult operating environment was “a testament to the demand for our iconic brands and the unmatched operating capabilities of our world-class franchise partners.”
He also highlighted the company’s 15% year-over-year increase to digital sales, with digital mix now exceeding 40%.
“Momentum in our digital sales continued in the first quarter as a result of both continued system sales growth and digital mix expansion, reaching a 1Q record of approximately $6 billion,” Gibbs said.
Following the release of its earnings, Yum was trading at about $118 a share, up about 2.8%.
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