Categories: Earnings

Yum! Brands Digital Sales Reach Record $3.5B Amid Pandemic

Yum! Brands, Inc. reported on Thursday (July 30) that digital sales grew to an all-time high of $3.5 billion for the second quarter, marking a rise of over $1 billion from the past year.

“We now have over 34,000 restaurants offering delivery around the world, representing a 13 percent increase year-over-year in part driven by expanded aggregator partnerships,” CEO David Gibbs said on an earnings call with analysts.

Gibbs said KFC registered its highest average sales per store in the brand’s history in a week in early May.

“The timing of our launch of for pickup and delivery, the addition of new aggregators and our bundled bucket meals that travel well all contributed to a fantastic quarter,” Gibbs said.

Gibbs said the company rolled out its contactless initiative for Pizza Hut during the quarter by adding more pickup and payment options for customers. The brand has served nearly 20 million contactless digital orders as of March 2020.

“We've also welcomed several million new and re-engaged customers to our Hut Rewards loyalty program,” Gibbs said.

For Taco Bell U.S., Gibbs said the company pivoted its marketing to highlight group bundles and fuel awareness of contactless drive-thru as well as delivery.

On the downside, Yum! Brands’ worldwide system sales excluding foreign currency translation dropped 12 percent, with a 15 percent same-store sales decline.

“The quarter was significantly impacted by COVID-19, the primary driver of our 25 percent core operating profit decline,” Gibbs said. “The impact on our sales in each of our markets depended on the timing, severity and duration of the outbreak, as well as our reliance on dine-in sales in the market. Overall, our sales declines were primarily driven by temporary store closures, which peaked in early April at about 11,000 restaurants.”

Gibbs reported that some 95 percent of the company’s global system eateries are now at least partially open.

The company’s KFC division opened 234 gross new restaurants in 36 nations, the Pizza Hut division opened 70 new gross restaurants in 14 nations, and Taco Bell opened 22 gross new restaurants in four nations.

The Habit Burger Grill division, which Yum! Brands recently acquired, opened two gross new restaurants in the United States.

As far as its overall results, Yum! Brands reported earnings per share excluding special items of 82 cents on $1.2 billion in revenue. Those results exceeded analyst expectations of 54 cents on $1.19 billion.

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