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KFC, Taco Bell parent sees revenue rise 34 percent

The corporate that owns KFC and Taco Bell posted better-than-expected gross sales within the second quarter because of stronger buyer demand and a report new retailer constructing spree.

Yum Manufacturers constructed 603 internet new shops through the quarter, together with 522 KFC shops in 62 nations.

On account of the robust quarter, the corporate raised its outlook for brand new retailer development from 4% to between 4% and 5% in 2021 and 2022. CEO David Gibbs mentioned the tempo of retailer openings mirrored the well being of the corporate’s manufacturers popping out of the pandemic.

“When our unit economics are good, it’s a horny proposition for our franchisees to construct,” Gibbs mentioned in a convention name with buyers Thursday. Worldwide, 98% of Yum’s eating places are owned by franchisees.

Income for the Louisville, Kentucky, firm rose 34% within the April-June interval to $1.6 billion. That was forward of Wall Avenue’s forecast of $1.48 billion, in line with analysts polled by FactSet.

Gibbs additionally famous a pointy improve in digital gross sales, together with on-line orders for pickup and supply. Digital orders grew 35% year-over-year to $5 billion.

Digital orders save on labor prices and guarantee extra seamless service, Gibbs mentioned, and prospects ordering on-line additionally are likely to order extra.

Customers ordering from KFC in Hong Kong
CEO David Gibbs mentioned the tempo of retailer openings — 603 through the quarter — mirrored the well being of the corporate’s manufacturers popping out of the pandemic.
SOPA Pictures/LightRocket by way of Getty Pictures

“Digital is a kind of issues that don’t have any draw back,” he mentioned.

To facilitate that development, Yum agreed to accumulate Dragontail, an Australian tech firm, in Might. Dragontail’s platform helps handle kitchen orders and dispatch supply drivers; the deal is predicted to shut by the top of the third quarter. Yum now presents supply from greater than 70% of its shops globally.

Yum’s scale — with greater than 50,000 eating places worldwide — helps blunt the impression of upper commodity costs, Gibbs mentioned. However he mentioned U.S. franchisees have made “average” value will increase to account for greater labor prices.

Eating places have been struggling to hire enough workers because the pandemic eases and demand soars. On Wednesday, Yum rival McDonald’s mentioned it has raised pay for U.S. employees by 5% this yr.

A now hiring sign outside a Taco Bell restaurant
Eating places have been struggling to rent sufficient employees because the pandemic eases and demand soars.
Getty Pictures

Identical-store gross sales, or gross sales at places open a minimum of a yr, jumped 23%, which was greater than Wall Avenue anticipated. Final yr, the corporate’s same-sales dropped 15% within the second quarter because the pandemic slowed buyer site visitors.

Identical-store gross sales additionally rose in comparison with 2019 ranges. However on that foundation the numbers had been extra uneven, with stronger leads to the U.S. the place extra shops have absolutely reopened.

KFC U.S. same-store gross sales jumped 19% in comparison with 2019 ranges, for instance, however worldwide KFC same-store gross sales fell 1%. The corporate mentioned 2% of its worldwide shops remained briefly closed because of virus restrictions on the finish of June.

A man wearikng a mask rides a bicycle past a Taco Bell
Yum Manufacturers mentioned its eating places, which embrace Taco Bell, noticed a 35 p.c improve in digital gross sales, together with on-line orders for pickup, through the quarter.
Getty Pictures

Yum China Holdings, a separate firm that reported outcomes Wednesday, mentioned it needed to shut or prohibit service at 400 eating places in southern China in late Might because of a coronavirus outbreak.

Equally, Pizza Hut’s U.S. same-store gross sales rose 9% in comparison with 2019, whereas worldwide same-store gross sales had been down 6%.

Web revenue rose 89% to $391. Adjusted for one-time gadgets, the corporate earned $1.16 per share. That was additionally forward of analysts’ forecast of 96 cents.

Yum Manufacturers shared rose 6% to $129.82 in afternoon buying and selling.

Yum’s outcomes got here the day after McDonald’s reported a big rebound within the second quarter. McDonald’s mentioned its world same-store gross sales jumped 40.5% within the April-June interval.

https://nypost.com/2021/07/29/kfc-taco-bell-parent-sees-revenue-rise-34-percent/ | KFC, Taco Bell mother or father sees income rise 34 p.c

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