Yum! Brands stock topped up as investors saw the bright side on earnings

KFC, Pizza Hut and Taco Bell parent Yum! Brands (NYSE:YUM) saw its shares trade up 2.65% in Tuesday’s regular trading, as investors took a glass-half-full view of its second quarter.

Earnings (adjusted) per share came in at $1.35, beating a consensus Wall Street forecast of $1.33.

Revenue was undercooked at $1.76 billion for the quarter, versus an estimate of $1.8 billion.

Among the reasons offered by the fast-food firm were reduced consumer spending and tensions in the Middle East, where around 200 stores are temporarily closed.

The Taco Bell business, which is mostly confined to the United States and is position in the market for more ‘cost conscious’ consumer. Here, same store sales were up 5%

KFC and Pizza Hut meanwhile saw a decline in gross sales.

Overall, the fast food firm said net sales were up 4% across the group helped by an increase in its store count – on a ‘same store’ basis sales were overall down 1%.

The power of Taco Bell

“I’m incredibly pleased with how well our teams have managed through a challenging operating environment,” Yum! chief executive David Gibbs said, whilst highlighting that ‘core operating profit’ was up 10%.

Gibbs added: “Our twin growth engines of Taco Bell U.S. and KFC International combined delivered 5% system sales growth led by 8% unit growth.

“Second-quarter results most clearly showcased the power of the Taco Bell brand thanks to unmatched, crave-worthy innovation and a successful menu expansion to a new platform offering.”

He also talked up the group’s AI initiatives, which include innovative ‘Voice AI’ operated Taco Bell drive-thrus.

Investors took the results positively with the stock 2.65% higher, finishing Tuesday’s regular trading at $136.85.