Yum! Brands (YUM) Q2 2024 earnings summary

Executive summary

• Core operating profit grew 10% in Q2, with GAAP operating profit up 6%, driven by Taco Bell US and KFC International, despite macro and geopolitical headwinds, including the Middle East conflict.

• System sales increased 3% year-over-year, with 5% unit growth and strong digital sales exceeding 50% of total sales.

• Total Q2 revenues rose 4% to $1.76 billion; net income was $367 million, down from $418 million last year.

• Digital and technology initiatives, including AI and proprietary platforms, contributed to operational efficiency and margin expansion.

• Continued focus on value offerings and innovation to address consumer affordability and drive traffic.

Financial highlights

• System sales up 3% year-over-year, with 5% unit growth; Q2 revenues up 4% to $1.76 billion.

• Core operating profit increased 10% to $645 million; reported operating profit up 6% to $607 million.

• Ex-special G&A expense was $256 million, down 9% year-over-year; reported G&A was $281 million, including $25 million in special expenses.

• Ex-special EPS was $1.35, with a $0.20 negative impact from higher tax rate and lower investment gains, and $0.03 from FX; GAAP EPS was $1.28, down 12%.

• Opened 894 units in Q2, the second highest Q2 gross openings in company history.

Outlook and guidance

• On track for 5% unit growth for full year 2024, with gross unit openings expected to match 2023 levels.

• Management expects at least 8% core operating profit growth for 2024, excluding the 53rd week.

• Full-year operating cash flows expected to exceed $1.3 billion.

• Foreign currency expected to negatively impact divisional operating profit by $25–$35 million for the full year.

• Full year Taco Bell company-operated store margins expected in the 23%-24% range.