YUM! Brands' Earnings Call Reveals How Restaurants Are Recovering from COVID-19

YUM! Brands, the massive fast food corporation that operates Taco Bell, KFC, Pizza Hut and others, reported its 2020 Q4 earnings on Thursday, giving a snapshot of how the restaurant industry is still recovering from COVID-19.

Overall, YUM! beat expectations on earnings and revenue, reporting adjusted earnings per share of $1.15, instead of the $.99 expected and $1.74 billion in revenue instead of the $1.72 billion expected. As of 2 p.m. EST on Thursday, the company’s stock was down just under 1%.

Of the company’s major brands, only Taco Bell posted positive same-store sales growth in the quarter. David Gibbs, the company’s CEO, attributed this to expanding the brand’s delivery presence, a loyalty program and bringing back old menu favorites.

“Taco Bell U.S. stayed focused on simultaneously building the brand over time and building sales overnight,” said Gibbs on the call.

Taco Bell’s placement on third-party delivery apps “helped delivery grow to a high-single-digit sales mix for the quarter,” said Gibbs.

Pizza Hut, on the other hand, saw a 1% same-store sales drop as its stores in the U.S. perked up 8%, but international same-store sales dropped 7%.

“20% of the Pizza Hut stores were in the hands of a poorly capitalized operator previously,” said Gibbs, referring to NPC International, which sold 950 Pizza Hut stores to Flynn Restaurant Group. “We expect Flynn's ownership of these restaurants will make the entire Pizza Hut U.S. system stronger, and welcome Greg Flynn and his team to the Pizza Hut family. The near-term plans include modernization of a significant portion of the restaurants acquired, while improving operations.”