Yum Brands (YUM) Q1 2025 earnings

Yum Brands on Wednesday reported mixed quarterly results as Pizza Hut’s same-store sales dropped more than expected.

Shares of the company fell more than 1% in premarket trading.

Here’s what the company reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $1.30 adjusted vs. $1.29 expected
• Revenue: $1.79 billion vs. $1.85 billion expected

Yum reported first-quarter net income of $253 million, or 90 cents per share, down from $314 million, or $1.10 per share, a year earlier.

Excluding costs to move KFC’s U.S. headquarters to Texas and other items, the company earned $1.30 per share.

Net sales climbed 12% to $1.79 billion. Across all of its brands, Yum’s same-store sales rose 3%.

Once again, Pizza Hut was the laggard this quarter. The struggling pizza chain saw its same-store sales shrink 2%, a steeper decline than the 0.1% decrease projected by StreetAccount estimates. Pizza Hut’s U.S. same-store sales slid 5%, while the metric was flat in international markets.

“In the U.S., sales started soft in January and improved through February and March,” CEO David Gibbs said on the company’s conference call. “With the last few weeks showing sequential gains in revenue and transaction growth, the U.S. business faced an intense competitive environment to drive momentum.”

Taco Bell, the standout of Yum’s portfolio, reported same-store sales growth of 9%, topping estimates of 8%. The chain saw traffic growth across all income cohorts, and menu items like Steak and Queso Crunchwrap sliders and Crispy Chicken Nuggets drew diners to its restaurants.

“I know this is a tough operating environment for everybody else in the industry,” Gibbs said. “It just is probably an environment that favors Taco Bell, and that’s what you’re seeing there, firing on all cylinders.”

KFC’s same-store sales rose 2%, beating estimates of 1.4%. The bulk of the fried chicken chain’s sales come from outside the U.S. China, its largest market, saw system sales growth of 3%.

But like Pizza Hut, KFC’s U.S. business has been struggling. The chain’s domestic same-store sales shrank 1% in the quarter. Rival Wingstop and Raising Cane’s have overtaken KFC’s U.S. sales, pushing the Yum chain down to the fifth-largest domestic chicken chain, according to Circana’s 2025 ranking of U.S. restaurants by sales.

Yum recently tapped Catherine Tan-Gillespie, the former chief marketing officer of KFC U.S., to lead the chain’s domestic business.

Digital orders, which include those on mobile apps and in-store kiosks, accounted for 55% of Yum’s total sales this quarter.

Yum isn’t expecting any material impact to its global supply chain from trade conflicts sparked by President Donald Trump‘s tariffs. Moreover, the company also hasn’t seen any consumer backlash as a U.S. brand operating internationally, even as tensions between the U.S. and its key market of China rise.

“We have not seen, and we obviously monitor this, any anti-American consumer sentiment,” Gibbs said.

For the full year, Yum reiterated that it will be able to reach its long-term target of 8% core operating profit growth. However, the company expects lower profit growth in the first half of 2025, thanks in part to one-time expenses, like a global franchise convention in Australia.

In late March, Gibbs announced plans to retire in the first quarter of 2026. The company’s board is currently searching for his replacement.