(Reuters) -KFC-parent Yum Brands Inc reported quarterly comparable sales that beat Wall Street estimates on Wednesday, driven by strong online demand for its tacos and fried chicken and new offerings across its restaurants.
To attract more customers, Yum has launched special menu items, including a crispy chicken sandwich taco at Taco Bell, a Detroit-style pizza at Pizza Hut and a plant-based imitation of its fried chicken at KFC.
Overall comparable sales jumped 5%, topping estimates of 4.5%, according to Refinitiv data, with the company nearly doubling its digital business compared with pre-pandemic levels.
“The strong digital numbers come as a result of the investments we’ve been making… whenever you nearly double your digital sales in two years, I think that is evidence that those investments are paying off,” said David Gibbs, chief executive officer, on an earnings call.
Yum has bought companies that are focused on digital ordering as well as automating and streamlining the kitchen flow over the past few months.
Same-store sales at KFC rose 5% in the fourth quarter ended Dec. 31, while that of Taco Bell increased 8%. Analysts were expecting them to increase 4.1% and 6.1%, respectively.
Yum shares rose 2% to $127.20.
However, adjusted earnings stood at $1.02 per share, missing estimates of $1.09.
Although demand for fast food remains robust, companies have been hit by higher costs due to record inflation and a labor shortage in the United States.
Total net costs and expenses increased 10% to $1.39 billion.
Chief Financial Officer Christopher Turner warned that general and administrative expenses would pressure operating profit growth in the first six months of this year before abating in the second half.
Louisville, Kentucky-based Yum said it opened nearly 1,700 new restaurants in the quarter, taking the tally to 4,180 during 2021. It now has more than 53,000 restaurants.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Amy Caren Daniel)
