Yum! Brands Reports Second-Quarter Results

KFC International Unit Growth 7% and Taco Bell Same-Store Sales Growth 4%;

Over $9 Billion Digital System Sales with Record 57% Digital Sales Mix

Yum! Brands, Inc. (NYSE:YUM) today reported results for the second quarter ending June 30, 2025. Second-quarter GAAP EPS was $1.33 and second-quarter EPS excluding Special Items was $1.44, a 7% increase year-over-year.

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DAVID GIBBS COMMENTS

David Gibbs, CEO, said "Our second-quarter results are a testament to the power of our bold food innovation, digital transformation, and the strength of our iconic brands. Taco Bell U.S. meaningfully outpaced the category with 4% same-store sales growth, and KFC International opened 565 gross new units. I am confident that with our strong development across the system, improving value propositions, and exciting new uses of our proprietary, integrated tech stack, Yum! is well positioned to win in an ever-changing consumer landscape. As I reflect on my incredible 36-year journey with Yum!, it's been a joy to bring our iconic brands to consumers around the world in collaboration with our world-class franchise partners and team members. Yum! is in an enviable position with the very best talent and leaders in this industry at the helm of our global brands. I couldn't be more confident passing the torch to Chris Turner, whose deep understanding of our business and bold vision will continue to propel Yum! forward."

RECENT STRATEGIC ANNOUNCEMENTS

• On June 17^th, we announced that the Board of Directors unanimously elected Chris Turner to succeed David Gibbs as Chief Executive Officer, effective October 1, 2025. David will serve as an adviser to the Company until the end of 2026 to ensure a seamless transition. Chris has served as Chief Financial Officer since 2019 and expanded his role to include Chief Franchise Officer in 2024. During his time at Yum!, Chris has been instrumental in driving bold actions including transforming the digital and technology organization, launching Byte by Yum!, centralizing Yum!'s global supply chain, and driving ideation for new, bold concepts within our portfolio.
• On June 26^th, Taco Bell announced plans to scale its innovative beverage concept Live Más Café to 30 locations by the end of 2025. The concept offers over 30 signature beverages, from Churro Chillers and specialty coffees to Refrescas and Dirty Mountain Dew® Baja Blast® Dream Sodas. This launch is part of the brand's long-term beverage strategy to reach $5 billion in beverage sales by 2030.

SECOND-QUARTER HIGHLIGHTS

• Worldwide system sales grew 4%, excluding foreign currency translation, led by Taco Bell at 6% and KFC at 5%.
• Unit count increased 3% including 871 gross new units in the quarter.
• Robust digital system sales exceeding $9 billion, with record digital mix of approximately 57%.
• Foreign currency translation favorably impacted divisional operating profit by $4 million.

KFC DIVISION

• KFC Division opened 566 gross new restaurants across 58 countries.
• Company-owned restaurant margins were 12.1%, up slightly year-over-year.
• Foreign currency translation favorably impacted operating profit by $4 million.

TACO BELL DIVISION

• Taco Bell Division opened 50 gross new restaurants across 10 countries.
• Taco Bell U.S. system sales grew 6% and Taco Bell International system sales excluding foreign currency translation, grew 11%.
• Taco Bell U.S. and Taco Bell International same-store sales both grew 4%.
• Taco Bell U.S. company-owned restaurant margins were 24.5%, a 110 basis point decrease year-over-year.

PIZZA HUT DIVISION

• Pizza Hut Division opened 254 gross new restaurants across 32 countries.
• Pizza Hut Division operating profit growth was negatively impacted in the quarter by 3 percentage points due to timing of technology spending within Franchise advertising and other services expense, 2 percentage points due to expense associated with three franchise entities that are transitioning to new ownership and 2 percentage points due to expenses associated with our bi-annual Global Franchise Convention.
• Foreign currency translation had a negligible impact on operating profit.

HABIT BURGER & GRILL DIVISION

• Habit Burger & Grill Division opened 1 gross new restaurant.
• Habit Burger & Grill Division system sales declined 1% with same-store sales declining 4%.

OTHER ITEMS

• See reconciliation of Non-GAAP Measurements to GAAP results within this release for further detail of Special Items by financial statement line item including the impact of Special Items on General and administrative expenses.
• Disclosures pertaining to outstanding debt in our Restricted Group capital structure will be provided at the time of the filing of the second-quarter Form 10-Q.

LONG-TERM GROWTH ALGORITHM

• The Company targets the following long-term financial performance metrics, first announced in 2022, that it believes it can achieve over an extended period of time, on average:
  • 5% Unit Growth
  • 7% System Sales Growth, excluding F/X and 53rd week; and
  • At least 8% Core Operating Profit Growth, excluding F/X and 53rd week³

CONFERENCE CALL

Yum! Brands, Inc. will host a conference call to review the company's financial performance and strategies at 8:15 a.m. Eastern Time August 5, 2025. The number is 404/975-4839 for U.S. callers, 833/950-0062 for Canada callers, and +1/404-975-4839 for international callers, conference ID 362231.

The call will be available for playback beginning at 10:00 a.m. Eastern Time August 5, 2025 through August 12, 2025. To access the playback, dial 866/813-9403 in the U.S., 226/828-7578 in Canada, and +1/929-458-6194 internationally, conference ID 252965.

The webcast and the playback can be accessed by visiting Yum! Brands' website, investors.yum.com/events-and-presentations and selecting "Q2 2025 Yum! Brands, Inc. Earnings Conference Call."

ADDITIONAL INFORMATION ONLINE

Quarter-end dates for each division, restaurant count details, definitions of terms and Restricted Group financial information are available at investors.yum.com. Reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures are included in our Condensed Consolidated Summary of Results.

FORWARD-LOOKING STATEMENTS

This announcement may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as "expect," "expectation," "believe," "anticipate," "may," "could," "intend," "belief," "plan," "estimate," "target," "predict," "likely," "seek," "project," "model," "ongoing," "will," "should," "forecast," "outlook" or similar terminology. These statements are based on and reflect our current expectations, estimates, assumptions and/ or projections, our perception of historical trends and current conditions, as well as other factors that we believe are appropriate and reasonable under the circumstances. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause our actual results to differ materially from those indicated by those statements. There can be no assurance that our expectations, estimates, assumptions and/or projections, including with respect to the future earnings and performance or capital structure of Yum! Brands, will prove to be correct or that any of our expectations, estimates or projections will be achieved.

Numerous factors could cause our actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: food safety and food- or beverage-borne illness concerns; adverse impacts of health epidemics, deterioration in public health conditions or the occurrence of other catastrophic or unforeseen events; the success and financial stability of our concepts' franchisees, particularly in light of challenging macroeconomic conditions; the success of our development strategy; anticipated benefits from past or potential future acquisitions, investments, other strategic transactions or initiatives, or our portfolio business model; our significant exposure to the Chinese market; our global operations and related exposure to geopolitical instability, including as a result of the Middle East conflict as well as the expansion or threatened expansion of restrictive trade policies which could also impact sentiment for U.S. brands; foreign currency risks and foreign exchange controls; our ability to protect the integrity or availability of IT systems or the security of confidential information and other cybersecurity risks; compliance with data privacy and data protection legal requirements and reporting obligations; our ability to successfully and securely implement technology initiatives, including utilization of artificial intelligence; our increasing dependence on digital commerce platforms; the impact of social media; our ability to protect our trademarks or other intellectual property; shortages or interruptions in the availability and the delivery of food, equipment and other supplies; the loss of key personnel or failure to successfully transition senior management, labor shortages and increased labor costs, including as a result of state and local legislation related to wages and working conditions; changes in food prices and other operating costs; our corporate reputation, the value and perception of our brands and changes in consumer preferences such as wellness trends; evolving expectations and requirements with respect to social and environmental sustainability matters; adverse effects of severe weather and climate change; pending or future litigation and legal claims or proceedings; changes in, or noncompliance with, legal requirements; tax matters, including changes in tax rates or laws, impositions of new taxes, tax implications of our restructurings, or disagreements with taxing authorities; changes in consumer discretionary spending and macroeconomic conditions, including inflationary pressures and elevated interest rates; competition within the retail food industry; and risks relating to our level of indebtedness. In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The forward-looking statements included in this announcement are only made as of the date of this announcement and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances.

You should consult our filings with the Securities and Exchange Commission (including the information set forth under the captions "Risk Factors" and "Forward-Looking Statements" in our most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q) for additional detail about factors that could affect our financial and other results.

Yum! Brands, Inc., based in Louisville, Kentucky, and its subsidiaries franchise or operate a system of over 61,000 restaurants in more than 155 countries and territories under the company's concepts – KFC, Taco Bell, Pizza Hut and Habit Burger & Grill. The Company's KFC, Taco Bell and Pizza Hut brands are global leaders of the chicken, Mexican-inspired food and pizza categories, respectively. Habit Burger & Grill is a fast casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. In 2024, Yum! was named to the Dow Jones Sustainability Index North America and 3BL's list of 100 Best Corporate Citizens. In 2025, the Company was recognized among TIME magazine's list of Best Companies for Future Leaders. In addition, KFC, Taco Bell and Pizza Hut led Entrepreneur's Top Global Franchises 2024 list and were ranked in the first 25 of Entrepreneur's 2025 Franchise 500, with Taco Bell securing the No. 1 spot in North America for the fifth consecutive year.

Category: Earnings

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Analysts are invited to contact:

Matt Morris, Head of Investor Relations at 888/298-6986

Members of the media are invited to contact:

Lori Eberenz, Director, Public Relations, at 502/874-8200