KFC parent Yum Brands misses comparable sales estimates on Delta hit

The company is also facing a severe labor crunch in the United States

  

KFC owner Yum Brands Inc beat Wall Street estimates for quarterly revenue and profit on Thursday, as steady demand for its fried chicken and tacos cushioned the blow from a slowdown in sales in its Pizza Hut chain.

The company benefited from customers returning to its restaurants following the roll-out of vaccinations, even as rising concerns over the Delta variant of the coronavirus kept consumers away from its stores in some key markets.

Rival fast-food chains Chipotle Mexican Grill and McDonald's have also delivered a strong beat in the quarter, aided by the reopening of seating areas in their restaurants and product price hikes.

However, Yum Brands' Pizza Hut division saw its U.S. system-wide sales drop 2% in the quarter, as pizza chains grapple with a slowdown in delivery demand following a surge during last year's lockdowns.

Earlier this month, rival Domino's Pizza Inc posted its first drop in U.S. same-store sales in over a decade as it also faced a tight labor market that created a shortage of drivers. 

Comparable sales for Yum Brands jumped 5% in the third quarter ended Sept. 30, missing the average estimate of a 6.5% increase, according to Refinitiv IBES.

The Taco Bell owner still reported an adjusted profit of $1.22 per share on revenue of $1.61 billion, beating estimates of earnings of $1.08 per share on revenue of $1.59 billion.

(Reporting by Deborah Sophia in Bengaluru; Editing by Shailesh Kuber) ((DeborahMary.Sophia@thomsonreuters.com;))


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