Taco Bell outbreak hits Yum Brands profit as growth engine falters

Yum Brands reported adjusted earnings of $1.56 per share, surpassing the $1.49 forecast by analysts. Total revenue hit $2.05 billion, aligning with market projections. Net income climbed to $1.62 billion, bolstered by the strategic divestiture of Pizza Hut operations in mainland China and other markets. Excluding the impact of the pizza chain’s sale, overall same-store sales remained flat as the Taco Bell health crisis disrupted consumer traffic throughout the quarter.

CEO Chris Turner maintained that the brand has recovered since the incident, noting that Taco Bell U.S. began outpacing the broader quick-service restaurant industry by late September. Elsewhere, KFC struggled to gain ground in the domestic market, where system sales dropped 6% amid heightened competition and tightening consumer budgets. International performance provided a buffer, with KFC recording a 1% sales increase in China and Europe, while Taco Bell’s smaller overseas division saw 5% growth.