Yum! Brands (YUM) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered strong top-line and profit growth, with total revenues up 15% to $2.06 billion and net income up 71% to $432 million, driven by robust system sales, margin expansion, and disciplined G&A spend.

• Over 63,000 restaurants in 155 countries, 97% franchised, operating across KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill segments.

• Strategic priorities under the Raise the Bar framework focus on consumer engagement, unit economics, and digital innovation via Byte.

• KFC and Taco Bell led divisional profit, with Taco Bell U.S. outperforming the QSR industry for the eighth consecutive quarter.

• Strategic review of Pizza Hut ongoing, with Hut Forward program launched and completion expected in 2026.

Financial highlights

• System sales grew 6% year-over-year (ex-FX), with digital sales mix reaching 63% and approaching $11 billion.

• Net income increased 71% to $432 million; diluted EPS was $1.55, up 72% year-over-year; EPS excluding Special Items was $1.50, up 15%.

• Operating profit grew 17% to $644 million; company restaurant margin was 13.7%.

• Opened 1,030 new stores in Q1, including 648 KFC and 30 Taco Bell units, with unit count up 5%.

• Excluding Pizza Hut, system sales grew 7%, G&A up 3%, and core operating profit up 10%.

Outlook and guidance

• Confident in meeting or exceeding long-term growth targets: 5% unit growth, 7% system sales growth (ex-FX), and at least 8% Core Operating Profit growth.

• Taco Bell U.S. restaurant-level margin guidance raised to 24.5%-25.5% for the year.

• Full-year interest expense expected at $510-$520 million, excluding new debt.

• Net leverage ratio targeted at approximately 4.0x EBITDA over the medium term.

• Q2 core operating profit for Pizza Hut expected at ~$70 million.