In 2024, Yum! Brands had a stellar year, driven by strong performance from Taco Bell in the United States, an impressive international expansion of KFC, and a remarkable surge in digital sales, which jumped by double digits.
While Taco Bell and KFC emerged as the primary growth drivers for Yum!, Pizza Hut struggled to keep pace.
Financial Performance Overview
By the end of the fiscal year on December 31, Yum! Brands reported a net income of $1.49 billion, translating to earnings of $5.25 per share.
This marked a 7% drop from the previous year’s earnings of $1.6 billion, or $5.68 per share.
Nonetheless, total revenues increased by 7% to $7.55 billion, up from $7.08 billion in 2023.
Excluding special items, the earnings for 2024 were 6% higher than last year’s figures.
The CEO of Yum! Brands highlighted the robust growth in core operating profits, emphasizing the strength of their business model amid a challenging consumer landscape and praising the dedication of their teams.
Taco Bell reported a notable 5% rise in same-store sales in the fourth quarter, outpacing industry averages.
At the same time, KFC International achieved a remarkable milestone, opening over 2,000 new units for the second consecutive year.
Digital and Operational Innovations
During a call with analysts on February 6, Yum! Brands’ leadership expressed confidence in the company’s future, stressing the need for a balance between everyday value and innovative marketing to attract a broader customer base.
They also reaffirmed their commitment to enhancing the digital experience, particularly at Pizza Hut, by upgrading their app.
Yum! Brands laid out its ambitious long-term strategy, targeting 5% unit growth, 7% system sales growth, and 8% core operating profit expansion.
Investors responded favorably, with the stock price climbing 10% to reach $144.01 on February 6, marking a new 52-week high.
Chief Financial Officer Christopher L. Turner proudly announced that the company added 4,535 new restaurants worldwide across all brands, spanning more than 100 countries.
Digital sales ascended by 15%, surpassing a 50% digital sales mix, showcasing Yum! Brands’ commitment to its goal of achieving 100% digital transactions.
Challenges and Future Outlook
However, Pizza Hut faces a tougher competitive landscape.
Leadership acknowledged that while initiatives like the $7 deal lovers drive repeat visits from loyal patrons, attracting casual diners will require more creative and striking promotional efforts.
The focus for 2025 includes balancing everyday value propositions with innovative campaigns designed to engage a broader customer base and further enhance the digital experience.
After a successful period of strengthening its balance sheet, Yum! Brands plans to pause its debt reduction efforts, reflecting their confidence in future growth.
The CFO indicated that the company aims to maintain a net leverage ratio of about four times in the medium term while simultaneously improving capital returns for shareholders.
In its earnings release, Yum! announced the termination of franchise agreements with IS Gida AS, a franchisee in Turkey, due to noncompliance with standards.
This decision affects 284 KFC and 254 Pizza Hut locations, and Yum! Brands is actively searching for a new franchise partner to spur future growth in the region.
The CEO reassured stakeholders that the changes in Turkey are not expected to substantially impact the company’s overall results in 2025, maintaining a steady outlook amid ongoing developments.
Source: Foodbusinessnews