Yum! Brands (YUM) investor relations material

Executive summary

• Completed strategic review and sale agreements for Pizza Hut, positioning for a more focused company and future growth.

• Excluding Pizza Hut, achieved 7% system sales growth, 6% unit growth, and 4% same-store sales growth year-over-year.

• KFC and Taco Bell delivered strong performance, with digital sales and loyalty programs driving engagement.

• Addressed a U.S. industry-wide food safety issue, with Taco Bell experiencing a temporary sales impact but showing early signs of recovery.

• Second-quarter GAAP EPS was $3.08, up 131% year-over-year; EPS excluding Special Items was $1.62, up 12% year-over-year.

Financial highlights

• Digital sales excluding Pizza Hut exceeded $17 billion in the first half, up 25% year-over-year.

• Q2 digital sales approached $9 billion, with a 61% digital mix excluding Pizza Hut.

• Total revenues for the quarter were $2.17 billion, up 12% year-over-year.

• Core operating profit grew 8% year-over-year, despite a 3% drag from refranchising gains and store closure costs.

• Net income was $853 million, up 128% year-over-year, driven by significant tax benefits related to the Pizza Hut sale.

Outlook and guidance

• Anticipates closing Pizza Hut transactions in August, with $2.3 billion in net proceeds expected.

• Plans to use proceeds to pay down revolver and repurchase shares, subject to market conditions.

• Q3 Taco Bell U.S. same-store sales growth quarter-to-date through July 27 is -2%, with steady improvement observed.

• Expects Taco Bell Q3 equity store margins between 19% and 21% due to temporary sales impact.

• Long-term targets: 5% unit growth, 7% system sales growth (ex-F/X), and at least 8% Core Operating Profit growth.