KFC’s Cost-Cutting Triumph: Yum Brands Celebrates Surge in Customer Traffic

Yum Brands (YUM.N) reported good sales and earnings for the same quarter, beating expectations. These numbers are on the company’s website. The company’s KFC outlets’ comparable sales jumped 13%, exceeding the predicted 8.29% gain. Options like the 2-for-5 fried chicken wrap and new goods like chicken nuggets appealed to low-income diners who struggled to pay high meal prices. They bought these things because they were enticing. David Gibbs, KFC’s CEO, said these perks appeal to new and younger customers, notably in the US, where KFC’s customer base expanded the fastest.

KFC’s 600 new locations in 60 countries demonstrate its success. KFC has grown because more people are eating chicken instead of beef. KFC’s success is due to this change in consumer tastes. Brian Yarbrough, an Edward Jones analyst, says more customers are ordering chicken at restaurants due to rising beef prices. This is especially true because meat prices keep rising.

KFC's Cost-Cutting Triumph Yum Brands Celebrates Surge in Customer Traffic
KFC’s Cost-Cutting

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Yum Brands’ Taco Bell and Pizza Hut outlets faced issues, resulting in fewer sales than expected. However, the company’s value has attracted consumers from all income levels. Some customers have migrated from more expensive fast-casual eateries to these services. Customers who already utilize these services are buying more often.

Yum Brands had fantastic earnings per share of $1.41, more than the average industry forecast of $1.24. COVID-19 and Russia-Ukraine war raised goods prices, which have since dropped. The group’s success is due to this.

Refinitiv IBES data showed that Yum Brands increased overall same-store sales by 9%, exceeding analysts’ expectations of 7.01%. The company’s shares rose a few percentage points in early trading due to these fantastic results. This gain can be explained by the company’s increasing shares. In the highly competitive fast food business, Yum Brands’ ability to adapt to changing customer tastes and concentration on creating a diversified client base have contributed to its success.

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