Yum Brands YUM

NYSE YUM

$137.30 -3.33 (-2.37%)

As of: Sep 24, 2026 · 3:59 PM EDT

Key Stats

Market Cap38.39 Bn

P/E17.45

P/S4.40

Div. Yield2.10

Total Debt (Qtr)15.09 Bn

Revenue Growth (1y) (Qtr)12.21

Add ratio to table…

About

Yum! Brands, Inc. develops, operates and franchises a worldwide system of quick service restaurants under four distinct concepts: KFC, Taco Bell, Pizza Hut and Habit Burger & Grill. The company's primary business involves supporting its franchise network through ongoing fees, brand development and operational support while maintaining strict quality and consistency standards across its global system. As of December 31, 2025, Yum! Brands, Inc. had over 63,000 restaurants in…

Yum! Brands, Inc. generates revenue primarily through continuing fees paid by franchisees based on a percentage of their restaurants' sales, which typically range from 4% to 6% for store-level agreements and involve lower percentages under master franchise arrangements. The company also collects initial fees upon store opening, renewal fees and transfer fees, while franchisees are required to spend a certain amount on advertising and promotion of the brand. System sales, which constitute sales of all restaurants both company-owned and franchised, totaled $68,295 million in 2025, driven by the performance of its four core concepts across global markets.

The company operates through the following segments: the KFC Division, the Taco Bell Division, the Pizza Hut Division and the Habit Burger & Grill Division.

KFC Division: This segment includes worldwide operations of the KFC concept, which specializes in fried and non-fried chicken products such as sandwiches, chicken strips, chicken-on-the-bone and other chicken products marketed under various names. As of December 31, 2025, the KFC Division had 33,897 units across 149 countries and territories, with 99% of units franchised and system sales of $36,434 million. The brand is built around Colonel Harland D. Sanders' secret blend of 11 herbs and spices, first perfected in 1939, and remains a global leader in the chicken category.
Taco Bell Division: This segment includes worldwide operations of the Taco Bell concept, which specializes in Mexican-style food products including various types of tacos, burritos, quesadillas, salads, nachos and other related items. As of December 31, 2025, the Taco Bell Division had 9,030 units across 38 countries and territories, with 93% of units franchised and system sales of $18,361 million. The brand was founded in 1962 by Glen Bell in Downey, California, and continues to innovate within the Mexican-inspired food segment.
Pizza Hut Division: This segment includes worldwide operations of the Pizza Hut concept, which specializes in ready-to-eat pizza products and operates in delivery, carryout and casual dining segments globally. As of December 31, 2025, the Pizza Hut Division had 19,974 units across 108 countries and territories, with 99% of units franchised and system sales of $12,794 million. The brand was first opened in 1958 in Wichita, Kansas, and maintains a strong presence in the fragmented pizza market despite an ongoing strategic options review initiated in 2025 to determine its optimal future approach.
Habit Burger & Grill Division: This segment includes worldwide operations of the Habit Burger & Grill concept, a fast-casual restaurant specializing in made-to-order chargrilled burgers, sandwiches and more over an open flame with fresh ingredients. As of December 31, 2025, the Habit Burger & Grill Division had 384 units across 2 countries and territories, with 22% of units franchised and system sales of $706 million. The brand originated in 1969 in Santa Barbara, California, and emphasizes a distinctive menu built around chargrilling techniques and premium ingredients.

Yum! Brands, Inc. holds a leading position within the global quick service restaurant industry, with its KFC, Taco Bell and Pizza Hut brands recognized as global leaders in the chicken, Mexican-inspired food and pizza categories respectively. The company competes intensely with other international, national and regional chains as well as locally-owned establishments across multiple dimensions including price, quality, product development, digital engagement and customer service. Its competitive advantages stem from its unrivaled culture and talent, the Recipe for Good Growth strategy focused on being loved, trusted and connected, and the scale-enabled innovation of the Byte by Yum! platform, which integrates artificial intelligence and digital tools to enhance restaurant operations and franchisee economics.

Yum! Brands, Inc. serves a broad customer base consisting of individual consumers seeking quick service, fast casual and convenience-oriented dining options across breakfast, lunch, dinner and daypart occasions. The company's customers range from individuals and families to groups visiting its restaurants for dine-in, carryout, drive-thru and delivery experiences, supported by both store-level personnel and third-party delivery aggregators. Franchisees themselves represent a critical customer segment, as the company's success depends on their ability to operate profitable units under the Yum! Brands, Inc. system, supported through training, technology and ongoing field consultation.

Investment Thesis

▲ Bull case

Yum! Brands is demonstrating robust growth momentum driven by strong performance across its core brands, particularly Taco Bell and KFC, with Taco Bell U.S. delivering 8% same-store sales growth in Q1 FY26, marking its eighth consecutive quarter of outperformance versus the industry, supported by the successful Luxe Value menu driving transaction growth and value mix expansion, while Taco Bell international system sales rose 16% year-over-year, fueled by exceptional performance in the U.K. (23% two-year stacked same-store sales growth), Canada (18%), and India (45%), indicating scalable international momentum and reinforcing the brand's global appeal beyond its domestic stronghold.
The company's strategic investments in technology and innovation are creating compounding advantages, with digital sales approaching $11 billion in Q1 FY26 and a record 63% digital mix company-wide, enabled by the rollout of Byte by Yum! to Taco Bell U.K. and planned expansion to KFC in the U.K. and Australia covering 2,000 additional locations, while Taco Bell U.S. piloted AI-driven A/B testing in drive-thrus with nationwide rollout planned for 2026, positioning the company to capture efficiency gains and personalized customer engagement at scale, directly enhancing unit economics and long-term profitability.
KFC's unit development momentum remains structurally strong, with 90% of its development agreements outside China contractually committed with existing franchisees, reducing execution risk, and the brand achieved a Q1 development record with 648 gross new stores across 45 countries, supported by innovative formats like prefabricated restaurants in Chile reducing build times by 17 weeks versus traditional construction, while the Quench beverage platform expansion to the U.K., Australia, and Canada demonstrates payback periods under three years on U.K. store refits, signaling scalable, high-return initiatives that improve new unit economics and accelerate payback timelines.
Taco Bell U.S. restaurant-level margins reached 23.9% in Q1 FY26, with management raising full-year guidance to 24.5%-25.5% due to improved top-line momentum and operational efficiency, reflecting the brand's ability to simultaneously drive sales growth and margin expansion through value innovation, enhanced customer experience, and superior execution in speed and order accuracy, supported by improving consumer satisfaction scores and declining complaint trends since rolling out operational improvements in 2025, indicating sustainable margin resilience even in inflationary environments.
Excluding Pizza Hut, Yum! delivered core operating profit growth of 10% in Q1 FY26, with system sales up 7% and G&A up only 3%, demonstrating operating leverage and disciplined cost control, while the company generated a run rate of approximately $1.8 billion in operating cash flow, with expectations to exceed $2.5 billion annually including debt capacity, supporting continued share repurchases (1.2 million shares for $185 million in Q1) and financial flexibility to fund growth initiatives or return capital, reinforcing confidence in the underlying earnings power of the core portfolio.

Yum! Brands is demonstrating robust growth momentum driven by strong performance across its core brands, particularly Taco Bell and KFC, with Taco Bell U.S. delivering 8% same-store sales growth in Q1 FY26, marking its eighth consecutive quarter of outperformance versus the industry, supported by the successful Luxe Value menu driving transaction growth and value mix expansion, while Taco Bell international system sales rose 16% year-over-year, fueled by exceptional performance in the U.K. (23% two-year stacked same-store sales growth), Canada (18%), and India (45%), indicating scalable international momentum and reinforcing the brand's global appeal beyond its domestic stronghold.
The company's strategic investments in technology and innovation are creating compounding advantages, with digital sales approaching $11 billion in Q1 FY26 and a record 63% digital mix company-wide, enabled by the rollout of Byte by Yum! to Taco Bell U.K. and planned expansion to KFC in the U.K. and Australia covering 2,000 additional locations, while Taco Bell U.S. piloted AI-driven A/B testing in drive-thrus with nationwide rollout planned for 2026, positioning the company to capture efficiency gains and personalized customer engagement at scale, directly enhancing unit economics and long-term profitability.
KFC's unit development momentum remains structurally strong, with 90% of its development agreements outside China contractually committed with existing franchisees, reducing execution risk, and the brand achieved a Q1 development record with 648 gross new stores across 45 countries, supported by innovative formats like prefabricated restaurants in Chile reducing build times by 17 weeks versus traditional construction, while the Quench beverage platform expansion to the U.K., Australia, and Canada demonstrates payback periods under three years on U.K. store refits, signaling scalable, high-return initiatives that improve new unit economics and accelerate payback timelines.
Taco Bell U.S. restaurant-level margins reached 23.9% in Q1 FY26, with management raising full-year guidance to 24.5%-25.5% due to improved top-line momentum and operational efficiency, reflecting the brand's ability to simultaneously drive sales growth and margin expansion through value innovation, enhanced customer experience, and superior execution in speed and order accuracy, supported by improving consumer satisfaction scores and declining complaint trends since rolling out operational improvements in 2025, indicating sustainable margin resilience even in inflationary environments.
Excluding Pizza Hut, Yum! delivered core operating profit growth of 10% in Q1 FY26, with system sales up 7% and G&A up only 3%, demonstrating operating leverage and disciplined cost control, while the company generated a run rate of approximately $1.8 billion in operating cash flow, with expectations to exceed $2.5 billion annually including debt capacity, supporting continued share repurchases (1.2 million shares for $185 million in Q1) and financial flexibility to fund growth initiatives or return capital, reinforcing confidence in the underlying earnings power of the core portfolio.

▼ Bear case

Yum! Brands faces significant headwinds from its Pizza Hut segment, which continues to underperform with flat system sales growth globally in Q1 FY26 and declining U.S. same-store sales of 4%, marking 10 consecutive quarters of comparable sales decline, while the ongoing Hut Forward investment continues to weigh on profitability, with Q1 and Q2 core operating profit impacted by one-time expenses, and the lack of progress updates on the strategic review despite being in exclusive talks to sell to LongRange Capital creates uncertainty over valuation, timing, and potential execution risk, leaving investors exposed to a prolonged overhang on a brand that represented 12% of total revenue in 2025.
The Habit Burger & Grill segment remains vulnerable to persistent inflationary pressures, particularly from beef costs, which continue to impact bottom-line performance despite new initiatives like the L.A. Dodgers partnership, with management acknowledging ongoing efforts to mitigate the impact but expecting approximately $5 million in noncash closure expenses in Q2 FY26 as part of network optimization in subscale markets, indicating structural challenges in achieving sustainable profitability in a competitive fast-casual landscape where differentiation and cost control are increasingly difficult.
Although KFC U.K. and international markets show strength, the U.S. business remains a concern, with system sales declining 2% in Q1 FY26 and same-store sales no longer disclosed due to being deemed immaterial to overall results, signaling persistent struggles in the home market amid intense competition and shifting consumer value expectations, despite efforts to leverage innovation from concepts like Saucy by KFC and menu revamps, raising doubts about the scalability of turnaround strategies in the company's largest and most competitive market.
The company's aggressive technology and AI investments, while promising, carry execution and adoption risks, including the scalability of AI-driven A/B testing in drive-thrus beyond pilot phases, the integration of Byte by Yum! across diverse international markets with varying technological infrastructure, and the reliance on digital channels that now represent 63% of sales, increasing exposure to cybersecurity threats, system outages, and evolving data privacy regulations, which could disrupt operations and erode customer trust if not managed effectively, particularly as the company scales these platforms globally.
Yum!'s financial leverage presents a vulnerability, with a net leverage ratio of approximately 3.8x at quarter-end and projected full-year interest expense between $510 million and $520 million, which, while manageable, limits flexibility in a rising rate environment or if operating performance deteriorates, especially given the company's reliance on continued strong cash flow generation to support share repurchases, debt reduction, and growth investments, and any shortfall in expected operating cash flow (currently guided at a $1.8 billion run rate) could constrain financial flexibility and increase pressure on earnings stability.

Yum! Brands faces significant headwinds from its Pizza Hut segment, which continues to underperform with flat system sales growth globally in Q1 FY26 and declining U.S. same-store sales of 4%, marking 10 consecutive quarters of comparable sales decline, while the ongoing Hut Forward investment continues to weigh on profitability, with Q1 and Q2 core operating profit impacted by one-time expenses, and the lack of progress updates on the strategic review despite being in exclusive talks to sell to LongRange Capital creates uncertainty over valuation, timing, and potential execution risk, leaving investors exposed to a prolonged overhang on a brand that represented 12% of total revenue in 2025.
The Habit Burger & Grill segment remains vulnerable to persistent inflationary pressures, particularly from beef costs, which continue to impact bottom-line performance despite new initiatives like the L.A. Dodgers partnership, with management acknowledging ongoing efforts to mitigate the impact but expecting approximately $5 million in noncash closure expenses in Q2 FY26 as part of network optimization in subscale markets, indicating structural challenges in achieving sustainable profitability in a competitive fast-casual landscape where differentiation and cost control are increasingly difficult.
Although KFC U.K. and international markets show strength, the U.S. business remains a concern, with system sales declining 2% in Q1 FY26 and same-store sales no longer disclosed due to being deemed immaterial to overall results, signaling persistent struggles in the home market amid intense competition and shifting consumer value expectations, despite efforts to leverage innovation from concepts like Saucy by KFC and menu revamps, raising doubts about the scalability of turnaround strategies in the company's largest and most competitive market.
The company's aggressive technology and AI investments, while promising, carry execution and adoption risks, including the scalability of AI-driven A/B testing in drive-thrus beyond pilot phases, the integration of Byte by Yum! across diverse international markets with varying technological infrastructure, and the reliance on digital channels that now represent 63% of sales, increasing exposure to cybersecurity threats, system outages, and evolving data privacy regulations, which could disrupt operations and erode customer trust if not managed effectively, particularly as the company scales these platforms globally.
Yum!'s financial leverage presents a vulnerability, with a net leverage ratio of approximately 3.8x at quarter-end and projected full-year interest expense between $510 million and $520 million, which, while manageable, limits flexibility in a rising rate environment or if operating performance deteriorates, especially given the company's reliance on continued strong cash flow generation to support share repurchases, debt reduction, and growth investments, and any shortfall in expected operating cash flow (currently guided at a $1.8 billion run rate) could constrain financial flexibility and increase pressure on earnings stability.

Segments Breakdown of Revenue (2025)

Peer group

Peer Comparison

Companies in the Quick-Service Restaurants

View all peers

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MCD	Mcdonalds Corp	168.67 Bn	19.24	6.09	39.86 Bn
2	SBUX	Starbucks Corp	107.32 Bn	54.13	2.80	14.78 Bn
3	CMG	Chipotle Mexican Grill Inc	41.40 Bn	29.45	3.33	-
4	YUM	Yum Brands Inc	38.39 Bn	17.45	4.40	15.09 Bn
5	QSR	Restaurant Brands International Inc.	25.02 Bn	19.59	2.58	13.34 Bn
6	DRI	Darden Restaurants Inc	24.39 Bn	20.46	1.85	2.33 Bn
7	RSTRF	Restaurant Brands International Limited Partnership	17.01 Bn	9.92	1.75	13.34 Bn
8	YUMC	Yum China Holdings, Inc.	14.09 Bn	13.86	1.13	0.13 Bn

Yum Brands YUM

About

Investment Thesis

Segments Breakdown of Revenue (2025)

Peer Comparison

Create an account

Sign In

Reset Password