Yum Brands (YUM) third-quarter revenue was in line with analysts’ expectation but profit came in lighter than anticipated amid weak sales at its Pizza Hut brand, which whipsawed its stock in pre-market trading.
Here were the numbers for Yum Brands’ third quarter, compared to Bloomberg-compiled estimates:
Revenue: $1.34 billion vs. $1.34 billion expected
Adj. earnings per share: 80 cents vs. 94 cents expected
Worldwide same-store sales: +3% vs. +3.3% expected
KFC same-store sales: +3% vs. +3.9% expected
Taco Bell same-store sales: +4% vs. +3.5% expected
Pizza Hut same-store sales: 0% vs. +1.6% expected
Yum’s shares, which ended Tuesday’s trading at $109.72 per share, shed as much as 6% in the wake of the news before clawing back some of those losses.
“Following a very strong first half of 2019 and in line with our expectations, third-quarter results were consistent with our long-term growth plan,” CEO Greg Creed said in a statement, who is set to retire.
“We’re rapidly approaching the end of a truly historic year. 2019 will not only mark the completion of our 3-year transformation of Yum!, but will also mark the end of my tenure as Yum! CEO,” he added.
In August, Yum Brands announced that long-time CEO Greg Creed will be succeeded by another Yum Brands veteran David Gibbs starting in January.
Yum also noted that it recorded a $60 million pre-tax investment expense related to the change in fair value of its investment in Grubhub (GRUB), which slashed 15 cents off earnings per share. Tuesday, Grubhub shares tanked 43% and had their worst day ever after the company issued weak fourth-quarter guidance due to rising competition in the delivery space.
The third quarter was an eventful one for fast-food restaurants. A slew of collaborations and widespread menu innovation brought excitement to an industry that has been fighting to stay relevant among consumers over recent years.
For the brands under the Yum umbrella, KFC partnered with plant-based protein maker Beyond Meat (BYND) to test meatless chicken called the Beyond Fried Chicken in one location in the Atlanta area. KFC sold out of the item in just 5 hours.
And after axing nine menu items to make room for new products, Taco Bell launched a new limited-time menu item, the Toasted Cheddar Chalupa during the last quarter. Meanwhile, Pizza Hut and Kellogg’s (K) collaborated on the Cheez-It Stuffed Pizza.
In addition, though it was announced in the fourth quarter, Pizza Hut and Kellogg’s partnered to test a plant-based pizza topping at a Phoenix location for a limited time starting Wednesday, October 23. The Garden Specialty Pizza featured Kellogg’s Incogmeato plant-based Italian sausages, onions, mushrooms and banana peppers.
Yum Brands third quarter follows rival Restaurant Brands third-quarter results released Monday. The fast food giant’s two major players, Burger King and Popeyes, reported same-store sales that blew past Wall Street estimates in the wake of a blowout response to the latter’s new chicken sandwich.
The offering went viral online, and sparked the summer’s chicken sandwich wars — selling out just two weeks after launch and giving Popeye’s one of its best quarters in nearly 20 years, CEO Jose Cil said. Popeyes will be bringing back the infamous chicken sandwich November 3.
Yum Brands shares rose more than 20% this year but have underperformed the broader market. The S&P 500 (^GSPC) jumped 23% in the same time period.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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