Yum! Brands, Inc. YUM is scheduled to report first-quarter 2026 results on April 29.
YUM’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 1.2%.
Trend in the Estimate Revision of YUM
The Zacks Consensus Estimate for first-quarter earnings per share (EPS) is pegged at $1.39, indicating a rise of 6.9% from $1.30 reported in the year-ago quarter.
Yum! Brands, Inc. Price and EPS Surprise
Yum! Brands, Inc. price-eps-surprise | Yum! Brands, Inc. Quote
For revenues, the consensus mark is pegged at $2 billion. The metric suggests a rise of 12.3% from the year-ago quarter’s figure.
Let us take a look at how things might have shaped up in the quarter to be reported.
Factors Likely to Shape YUM’s Quarterly Results
Yum! Brands’ first-quarter performance is likely to have benefited from digital initiatives, unit expansion and strong demand trends at Taco Bell and KFC. Strong system sales growth, driven by a combination of same-store sales and new unit development, is expected to have supported performance in the to-be-reported quarter. Focusing on technology-enabled operations and data-driven marketing is likely to have aided the company’s first-quarter performance.
Taco Bell’s performance is expected to have remained a key contributor in the first quarter, supported by continued market share gains and broad-based transaction growth across income cohorts. Strong engagement among younger consumers and families, along with sustained momentum in value platforms, menu innovation and loyalty participation, likely reinforced brand traction during the period. In parallel, KFC’s international business is expected to have supported overall system growth, driven by robust unit expansion, continued penetration in underpenetrated markets and an ongoing focus on menu innovation and value-led offerings.
Our model predicts first-quarter revenues from Taco Bell and KFC to rise 8.5% and 13.2% year over year, to $712.8 million and $875.3 million, respectively.
Growth in digital capabilities and franchise-driven revenues is likely to have supported YUM’s top line and margin profile. Investments in the Byte platform and integrated digital infrastructure are expected to have supported operational efficiency, improved customer engagement and enhanced restaurant-level execution. Our model predicts first-quarter property and franchise revenues to rise 6.5% year over year to $835.9 million.
However, elevated costs and ongoing challenges at Pizza Hut are likely to have weighed on first-quarter results. The brand remains under strategic review, with targeted closures of underperforming units and near-term investments expected to pressure operating profit. In addition, integration-related costs and marketing investments are likely to have limited margin expansion during the first quarter. Our model predicts the first quarter total costs and revenues to rise 8.6% year over year to $1.35 billion.
What Our Model Says About YUM Stock
Our proven model does not conclusively predict an earnings beat for Yum! Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that's not the case here.
Earnings ESP for YUM: Yum! Brands currently has an Earnings ESP of -1.62%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Yum! Brands’ Zacks Rank: The company currently has a Zacks Rank #3.
Stocks With the Favorable Combination
Here are some stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.
CAVA Group, Inc. CAVA currently has an Earnings ESP of +9.78% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the to-be-reported quarter, CAVA’s earnings are expected to decline 22.7%. CAVA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 26.5%.
The Cheesecake Factory Incorporated CAKE currently has an Earnings ESP of +1.20% and a Zacks Rank of 3.
In the to-be-reported quarter, Cheesecake Factory’s earnings are expected to register a 7.5% year-over-year rise. Cheesecake Factory’s earnings surpassed estimates in each of the trailing four quarters, with an average beat of 9.9%.
Chipotle Mexican Grill, Inc. CMG has an Earnings ESP of +1.80% and a Zacks Rank of 3 at present.
In the to-be-reported quarter, Chipotle’s earnings are expected to register a 17.2% year-over-year decline. Chipotle’s earnings surpassed estimates in each of the trailing four quarters, with an average beat of 3.6%.
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Yum! Brands, Inc. (YUM): Free Stock Analysis Report
Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report
The Cheesecake Factory Incorporated (CAKE): Free Stock Analysis Report
CAVA Group, Inc. (CAVA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).