KFC-parent Yum Brands tops same-store sales estimates as diners seek value meals

By Sanskriti Shekhar

Feb 4 (Reuters) - Yum Brands YUM.N topped quarterly sales estimates on Wednesday on the back of steady demand at Taco Bell in the U.S. and KFC in international markets as diners look for cheaper meals.

Fast‑food chains are leaning on value meals to attract budget‑conscious consumers who are wary of dining out after several quarters of price hikes.

Restaurants are also tweaking menus to add more protein and provide smaller portions, as usage of appetite-suppressing weight-loss drugs increases in the U.S.

Data from Consumer Edge showed that value offerings from Taco Bell were resonating not just with solo diners, but also with group and bulk orders, said Michael Gunther, vice president of research and market intelligence at the data firm.

Yum Brands planned to adjust portion sizes and add more lower-priced items and value deals at KFC to drive traffic, CEO Chris Turner said on a post-earnings call.

Still, the company missed fourth-quarter profit expectations, and operating margins at Taco Bell declined 0.5 percentage points, hurt by higher costs of commodities including beef.

Taco Bell U.S. same-store sales rose 7% in the quarter, helped by demand for its Tex-Mex cuisine and combo meals priced between $5 and $11.99.

KFC's worldwide same‑store sales rose 3% in the quarter, helped by new store openings.

Yum Brands said it would complete its strategic review of the Pizza Hut brand this year, and would close about 250 underperforming stores in the U.S. in the first half of 2026.

The company began exploring strategic options for Pizza Hut in November, and the chain reported its ninth straight quarter of fall in same-store sales.

Yum Brands' worldwide same-store sales rose 3% for the quarter ended December 31 and beat estimates of 2.74%, according to data compiled by LSEG.

Adjusted profit for the quarter was $1.73 per share, missing estimates of $1.77. The company's shares were down nearly 1% in choppy early trading.