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Yum! Brands (NYSE: YUM) Q1 2026 earnings rise as Taco Bell and KFC offset Pizza Hut

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(High)
Filing Sentiment
(Neutral)
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8-K

Rhea-AI Filing Summary

Yum! Brands reported strong first-quarter 2026 results, with broad-based growth led by Taco Bell and KFC. GAAP diluted EPS was $1.55, up 72% from $0.90, while EPS excluding Special Items rose 15% to $1.50 from $1.30. Net income increased 71% to $432 million.

Total revenues grew 15% to $2.06 billion, driven by 6% worldwide system sales growth excluding foreign currency and a 5% increase in unit count, including 1,030 gross new units. Digital system sales approached $11 billion with a record 63% of system sales coming through digital channels.

KFC system sales excluding currency rose 6% with 7% unit growth and 16% operating profit growth. Taco Bell delivered 10% system sales growth, 8% same-store sales growth and 16% operating profit growth. Pizza Hut system sales were flat excluding currency and operating profit declined 14%, as U.S. system sales fell 6% while international grew 4%.

Core Operating Profit, which removes Special Items and currency, increased 6% to $612 million. The company reiterated long-term targets of 5% unit growth, 7% system sales growth excluding currency and at least 8% Core Operating Profit growth over time.

Positive

  • Strong earnings and revenue growth: Q1 2026 revenues rose 15% to $2.06 billion and diluted EPS excluding Special Items increased 15% to $1.50, with GAAP EPS up 72% to $1.55 and net income up 71% to $432 million.
  • Healthy brand and digital performance: Worldwide system sales grew 6% excluding F/X, unit count rose 5% with 1,030 gross openings, digital system sales neared $11 billion and reached a record 63% of system sales, led by Taco Bell’s 8% same-store sales growth and KFC’s 7% unit growth.

Negative

  • Pizza Hut underperformance: Pizza Hut Division operating profit declined 14% to $64 million, operating margin contracted 690 basis points to 25.4%, and U.S. system sales excluding foreign currency fell 6%, contributing to flat overall Pizza Hut system sales growth excluding currency.

Insights

Yum! posts solid Q1 growth, with Taco Bell and KFC offsetting Pizza Hut softness.

Yum! Brands delivered 15% revenue growth to $2.06B, with diluted EPS excluding Special Items up 15% to $1.50. System sales grew 6% excluding F/X, while digital mix reached 63%, showing strong customer adoption of tech-enabled ordering.

Taco Bell and KFC remain key growth engines: Taco Bell same-store sales rose 8% and operating profit 16%; KFC system sales excluding F/X increased 6% with 7% unit growth. In contrast, Pizza Hut operating profit declined 14% and U.S. system sales fell 6%, underlining why management is incurring Special Item charges for a strategic options review.

Core Operating Profit grew 6% to $612M, below the company’s long-term target of at least 8% growth, while still positive. Upcoming updates, including the first-quarter 10-Q and progress on Pizza Hut’s strategic review initiated in 2025, will further clarify the sustainability of current trends.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Item 18.0 Item 18.0
Total revenues $2,059M Quarter ended 3/31/26, up 15% year-over-year
Diluted EPS (GAAP) $1.55 Q1 2026 vs $0.90 in Q1 2025, +72%
Diluted EPS excluding Special Items $1.50 Q1 2026 vs $1.30 in Q1 2025, +15%
Worldwide system sales growth ex F/X +6% Q1 2026 vs prior-year quarter
Digital system sales mix 63% Record share of system sales in Q1 2026, ~$11B
Core Operating Profit $612M Q1 2026 vs $575M in Q1 2025, +6%
Taco Bell same-store sales growth +8% First quarter 2026 vs prior year
Pizza Hut operating profit change -14% Q1 2026 vs Q1 2025, to $64M
System sales financial
"Worldwide system sales grew 6%, excluding foreign currency translation."
System sales are the total sales generated across an entire network of a business’s outlets, including both company-owned and independently operated (franchise) locations. Investors watch this figure because it shows the brand’s overall customer demand and growth beyond what the company records on its own books—like checking the total harvest from all farms using a seed brand rather than just the seed maker’s own field.
Same-store sales financial
"Taco Bell delivered an outstanding 8% same-store sales growth, meaningfully ahead of the QSR industry"
Same-store sales measure the revenue generated by stores that have been open for a certain period, typically a year, comparing their sales over different time frames. It helps assess whether a business is growing due to increased customer activity at existing locations rather than new stores. For investors, this figure indicates the health and performance of a company's core operations, independent of expansion efforts.
Core Operating Profit financial
"GAAP Operating Profit grew 17% and Core Operating Profit grew 6%."
Core operating profit is the company's profit from its normal day-to-day business activities after removing one-time items, unusual gains or losses, and financing or tax effects. Investors use it like a household budget that strips out unexpected windfalls or repairs: it shows the steady earnings power of the business and helps compare performance across periods or with peers without distortion from rare or non‑operational events.
Special Items financial
"First-quarter EPS excluding Special Items was $1.50, a 15% increase year-over-year."
Special items are unusual or infrequent gains or losses that a company reports separately from its regular operating profit, such as restructuring costs, asset write-downs, legal settlements, or one-time gains from selling a business. Investors pay attention because these items can make reported profits look better or worse than the company’s ongoing performance—like a homeowner’s one-off roof repair affecting a single month’s budget but not the household’s regular income and expenses.
Company restaurant margin financial
"Company-owned restaurant margins were 10.3%, up 100 basis points year-over-year."
Effective Tax Rate excluding Special Items financial
"Effective Tax Rate excluding Special Items | 18.0 % | 19.8 %"
Revenue $2,059M +15% YoY
Diluted EPS (GAAP) $1.55 +72% YoY
Diluted EPS excluding Special Items $1.50 +15% YoY
Net income $432M +71% YoY
Core Operating Profit $612M +6% YoY
Guidance

The company reiterated long-term targets of 5% unit growth, 7% system sales growth excluding foreign currency and at least 8% Core Operating Profit growth over an extended period.

Understanding 8-K Material Events →
0001041061false00010410612026-04-292026-04-29

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

April 29, 2026
________________________
YUM! BRANDS, INC.
(Exact name of registrant as specified in its charter)

Commission File Number 1-13163

North Carolina13-3951308
(State or other jurisdiction of(I.R.S. Employer
incorporation)Identification No.)
1441 Gardiner Lane,Louisville,Kentucky40213
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code:(502)874-8300
Former name or former address, if changed since last report:N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act
 Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
 Common Stock, no par valueYUMNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


    
Item 2.02 Results of Operations and Financial Condition

On April 29, 2026, YUM! Brands, Inc. (“YUM”) issued a press release announcing financial results for the quarter ended March 31, 2026.  A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Item 9.01Financial Statements and Exhibits

(d) Exhibits
Exhibit NumberDescription
99.1
Earnings Press Release dated April 29, 2026 from YUM! Brands, Inc.
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


   YUM! BRANDS, INC. 
   (Registrant) 



Date:April 29, 2026 /s/ David E. Russell 
David E. Russell
   Sr. Vice President, Finance and Corporate Controller 
   (Principal Accounting Officer) 


yumbrandslockuprgb_vertica.jpg
NEWS
Yum! Brands Reports First-Quarter Results
Taco Bell Same-Store Sales Growth 8%; KFC Unit Growth 7%;
Record Digital System Sales Mix of 63%

Louisville, KY (April 29, 2026) - Yum! Brands, Inc. (NYSE: YUM) today reported results for the first quarter ended March 31, 2026. First-quarter GAAP EPS was $1.55 and first-quarter EPS excluding Special Items was $1.50, a 15% increase year-over-year.

CHRIS TURNER COMMENTS
Chris Turner, CEO, said "We delivered solid topline momentum to start the year, with our fundamentals as strong as ever. Taco Bell delivered an outstanding 8% same-store sales growth, meaningfully ahead of the QSR industry, building off a very strong Q1 same-store sales growth rate in 2025. KFC delivered impressive unit growth and resilient same-store growth, with many KFC markets growing system sales double-digits. Yum! is incredibly well positioned to sustain sales momentum thanks to strong global consumer appeal for our brands, long-term consumption tailwinds, and our tech and AI capabilities."

FIRST-QUARTER HIGHLIGHTS
•Worldwide system sales grew 6%, excluding foreign currency translation.
•Unit count increased 5% including 1,030 gross new units in the quarter.
•GAAP Operating Profit grew 17% and Core Operating Profit grew 6%.
•Digital system sales approached $11 billion, with record digital mix of 63%.
•Foreign currency translation favorably impacted divisional operating profit by $25 million.
•Excluding Pizza Hut, system sales grew 7% excluding foreign currency translation, unit count grew 6% and Core Operating Profit grew 10%.

Reported Results% Change
System Sales
Ex F/X		Same-Store SalesUnitsGAAP Operating Profit
Core
Operating Profit1
KFC Division+6+2+7+16+9
Taco Bell Division+10+8+3+16+16
Pizza Hut DivisionEvenEven+1(14)(16)
Worldwide+6+3+5+17+6
First-Quarter
20262025% Change
GAAP EPS$1.55$0.90+72
Less Special Items EPS1
$0.05$(0.40)NM
EPS Excluding Special Items$1.50$1.30+15

1 See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Core Operating Profit and Special Items.
All comparisons are versus the same period a year ago.
System sales growth figures exclude foreign currency translation ("F/X") and core operating profit growth figures exclude F/X and Special Items. Special Items are not allocated to any segment and therefore only impact worldwide GAAP results. See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further details.
Digital system sales includes all transactions at system restaurants where consumers utilize ordering interaction that is primarily facilitated by automated technology.
Yum! Brands, Inc. • 1900 Colonel Sanders Lane • Louisville, KY 40213 • P: 502 874-8300 • investors.yum.com



KFC DIVISION

First-Quarter
%/ppts Change
20262025ReportedEx F/X
Restaurants34,33231,998+7N/A
System Sales ($MM)9,3288,340+12+6
Same-Store Sales Growth (%)+2+2NMNM
Franchise and Property Revenues ($MM)461407+13+7
Operating Profit ($MM)383331+16+9
Operating Margin (%)43.642.9+0.7+0.9

•KFC Division opened 648 gross new restaurants across 45 countries.
•Company-owned restaurant margins were 10.3%, up 100 basis points year-over-year.
•Foreign currency translation favorably impacted operating profit by $23 million.

KFC Markets1
Percent of KFC System Sales2
System Sales Growth Ex F/X
First-Quarter
(% Change)
China26%+5
Europe13%+2
United States12%(2)
Asia12%+11
Latin America8%+12
Australia7%+4
United Kingdom7%+9
Middle East / Turkey / North Africa6%+19
Africa5%+8
Canada2%(1)
India2%+16
1Refer to investors.yum.com/financial-information/financial-reports/ for a list of the countries within each of the markets.
2Reflects Full Year 2025.

Yum! Brands, Inc. • 1900 Colonel Sanders Lane • Louisville, KY 40213 • P: 502 874-8300 • investors.yum.com


TACO BELL DIVISION
First-Quarter
%/ppts Change
20262025ReportedEx F/X
Restaurants9,0218,723+3N/A
System Sales ($MM)4,3943,980+10+10
Same-Store Sales Growth (%)+8+9NMNM
Franchise and Property Revenues ($MM)251234+7+7
Operating Profit ($MM)281241+16+16
Operating Margin (%)35.236.7(1.5)(1.5)


•Taco Bell Division opened 30 gross new restaurants across 8 countries.
•Taco Bell U.S. system sales grew 10% and same-store sales grew 8%. U.S. company-owned restaurant margins were 23.9%.
•Taco Bell International system sales excluding foreign currency translation grew 16% and same-store sales grew 5%.

PIZZA HUT DIVISION
First-Quarter
%/ppts Change
20262025ReportedEx F/X
Restaurants19,94419,786+1N/A
System Sales ($MM)3,1143,028+3Even
Same-Store Sales Growth (%)Even(2)NMNM
Franchise and Property Revenues ($MM)142143(1)(3)
Operating Profit ($MM)6474(14)(16)
Operating Margin (%)25.432.3(6.9)(7.2)


•Pizza Hut Division opened 346 gross new restaurants across 27 countries.
•Foreign currency translation favorably impacted operating profit by $2 million.

First-Quarter (% Change)
InternationalU.S.
System Sales Growth Ex F/X+4(6)
Same-Store Sales Growth+2(4)

Pizza Hut Markets1
Percent of Pizza Hut System Sales2
System Sales Growth Ex F/X
First-Quarter
(% Change)
United States40%(6)
China19%+8
Asia13%+6
Europe12%(8)
Latin America7%+8
Middle East / Africa4%+11
Canada3%(2)
India2%+1
1Refer to investors.yum.com/financial-information/financial-reports/ for a list of the countries within each of the markets.
2Reflects Full Year 2025.
3


HABIT BURGER & GRILL DIVISION

•Habit Burger & Grill Division opened 6 gross new restaurants.
•Habit Burger & Grill Division system sales grew 7% and same-store sales grew 5%.

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 first-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
•At least 8% Core Operating Profit Growth1




















































1At this time, we are unable to forecast any Special Items or any impact from changes in F/X rates, and therefore cannot provide an estimate of Operating Profit Growth on a GAAP basis.
4

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 April 29, 2026. The number is 800/715-9871 for North America callers and +1/646-307-1963 for international callers, conference ID 8719077.

The call will be available for playback beginning at 10:00 a.m. Eastern Time April 29, 2026 through May 6, 2026. To access the playback, dial +1/800-770-2030 in North America and +1/609-800-9909 for all international callers, conference ID 8719077.

The webcast and the playback can be accessed by visiting Yum! Brands' website, investors.yum.com/events-and-presentations and selecting “Q1 2026 Yum! Brands, Inc. Earnings 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 public health conditions or other catastrophic or unforeseen events; the success and financial stability of our concepts’ franchisees; 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; the possibility that we may not be able to realize the anticipated benefits of a strategic review of the Pizza Hut brand or any potential transaction involving Pizza Hut; our significant exposure to the Chinese market; our global operations and related exposure to geopolitical instability, including the expansion or threatened expansion of restrictive trade policies and increasing anti-American sentiment; 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, data protection and emerging technology legal requirements; our ability to successfully and securely implement technology initiatives, including utilization of artificial intelligence; our increasing dependence on digital commerce and delivery 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 non-compliance 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 interest rate conditions; 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., and its subsidiaries franchise or operate more than 63,000 restaurants in 155 countries and territories under its iconic brands — KFC, Taco Bell, Pizza Hut and Habit Burger & Grill. KFC, Taco Bell and Pizza Hut are global leaders in the chicken, Mexican-inspired food and pizza categories, respectively. Habit is a fast-casual concept known for fresh, cooked-to-order food. Fueled by Yum!’s Recipe for Good Growth, KFC, Taco Bell and Pizza Hut led Entrepreneur's 2026 Franchise 500 rankings and its Top Global Franchises 2025 list. In 2026, Yum!’s unrivaled culture and talent led it to be named one of TIME magazine’s list of Best Companies for Future Leaders for the third consecutive year.
    
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
5

YUM! Brands, Inc.
Condensed Consolidated Summary of Results
(amounts in millions, except per share amounts)
(unaudited)
 Quarter ended% Change
 3/31/263/31/25B/(W)
Revenues
Company sales$785 $607 29
Franchise and property revenues856 785 9
Franchise contributions for advertising and other services418 395 6
Total revenues2,059 1,787 15
Costs and Expenses, Net
Company restaurant expenses677 520 (30)
General and administrative expenses322 302 (7)
Franchise and property expenses43 34 (28)
Franchise advertising and other services expense419 396 (6)
Refranchising (gain) loss(1)(5)(79)
Other (income) expense(45)(8)NM
Total costs and expenses, net1,415 1,239 (14)
Operating Profit644 548 17
Investment (income) expense, net— (1)(94)
Other pension (income) expense— — (7)
Interest expense, net128 120 (7)
Income before income taxes516 429 20
Income tax provision84 176 52
Net Income$432 $253 71
Basic EPS
EPS$1.56 $0.91 72
Average shares outstanding277 280 1
Diluted EPS
EPS$1.55 $0.90 72
Average shares outstanding279 282 1
Dividends declared per common share$0.75 $0.71 

See accompanying notes.

6

YUM! Brands, Inc.
KFC DIVISION Operating Results
(amounts in millions)
(unaudited)

 Quarter ended% Change
 3/31/263/31/25B/(W)
Company sales$255 $216 18
Franchise and property revenues461 407 13
Franchise contributions for advertising and other services163 149 9
Total revenues879 773 14
Company restaurant expenses229 196 (17)
General and administrative expenses87 80 (8)
Franchise and property expenses19 16 (19)
Franchise advertising and other services expense161 149 (8)
Other (income) expense— — NM
Total costs and expenses, net496 441 (12)
Operating Profit$383 $331 16
Company restaurant margin %1
10.3 %9.3 %1.0 ppts.
Operating margin43.6 %42.9 %0.7 ppts.
 
See accompanying notes.

1See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Company restaurant margin %.

7

YUM! Brands, Inc.
TACO BELL DIVISION Operating Results
(amounts in millions)
(unaudited)
 
 Quarter ended% Change
 3/31/263/31/25B/(W)
Company sales$372 $263 41
Franchise and property revenues251 234 7
Franchise contributions for advertising and other services175 160 9
Total revenues797 657 21
Company restaurant expenses284 204 (39)
General and administrative expenses53 49 (8)
Franchise and property expenses6 6 Even
Franchise advertising and other services expense173 157 (10)
Other (income) expense1 — NM
Total costs and expenses, net517 416 (24)
Operating Profit$281 $241 16
Company restaurant margin %1
23.6 %22.4 %1.2 ppts.
Operating margin35.2 %36.7 %(1.5) ppts.
 
See accompanying notes.

1See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Company restaurant margin %.



8

YUM! Brands, Inc.
PIZZA HUT DIVISION Operating Results
(amounts in millions)
(unaudited)

 
 Quarter ended% Change
 3/31/263/31/25B/(W)
Company sales$32 $3 825
Franchise and property revenues142 143 (1)
Franchise contributions for advertising and other services80 85 (6)
Total revenues253 231 10
Company restaurant expenses31 4 (757)
General and administrative expenses59 55 (8)
Franchise and property expenses17 11 (59)
Franchise advertising and other services expense84 89 6
Other (income) expense(3)(2)NM
Total costs and expenses, net189 156 (21)
Operating Profit$64 $74 (14)
Company restaurant margin %1
1.8 %(6.1)%7.9 ppts.
Operating margin25.4 %32.3 %(6.9) ppts.
 
See accompanying notes.

1See reconciliation of Non-GAAP Measurements to GAAP Results within this release for further detail of Company restaurant margin %.


9

YUM! Brands, Inc.
Condensed Consolidated Balance Sheets
(amounts in millions)
(unaudited)

 

3/31/26
12/31/25
ASSETS  
Current Assets 
Cash and cash equivalents$689 $709 
Accounts and notes receivable, less allowance: $88 in 2026 and $60 in 2025828 841 
Prepaid expenses and other current assets513 490 
Total Current Assets2,030 2,040 
Property, plant and equipment, net of accumulated depreciation of $1,517 in 2026
and $1,485 in 20251,622 1,605 
Goodwill971 969 
Intangible assets, net899 909 
Other assets1,738 1,708 
Deferred income taxes952 965 
Total Assets$8,211 $8,197 
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Accounts payable and other current liabilities$1,342 $1,433 
Income taxes payable35 46 
Short-term borrowings1,741 38 
Total Current Liabilities3,118 1,516 
Long-term debt10,213 11,872 
Other liabilities and deferred credits2,164 2,133 
Total Liabilities15,494 15,521 
Shareholders' Deficit
Common Stock, no par value, 750 shares authorized; 276 shares issued in 2026 and 277 shares issued in 2025
— — 
Accumulated deficit(6,971)(7,014)
Accumulated other comprehensive loss(312)(311)
Total Shareholders' Deficit(7,283)(7,325)
Total Liabilities and Shareholders' Deficit$8,211 $8,197 
 See accompanying notes.


10

YUM! Brands, Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in millions)
(unaudited)
 Quarter ended
 3/31/263/31/25
Cash Flows - Operating Activities 
Net Income$432 $253 
Depreciation and amortization60 45 
Refranchising (gain) loss(1)(5)
Deferred income taxes13 8 
Share-based compensation expense24 21 
Changes in accounts and notes receivable28 71 
Changes in prepaid expenses and other current assets(24)(57)
Changes in accounts payable and other current liabilities(75)(32)
Changes in income taxes payable(19)3 
Other, net(22)97 
Net Cash Provided by Operating Activities 416 404 
Cash Flows - Investing Activities
Capital spending(75)(71)
Acquisition of franchise restaurants(5)(16)
Proceeds from refranchising of restaurants— 15 
Maturities (purchases) of Short term investments, net— 90 
Other, net— (16)
Net Cash (Used in) Provided by Investing Activities(80)2 
Cash Flows - Financing Activities
Repayments of long-term debt(8)(5)
Revolving credit facilities, three months or less, net50 24 
Repurchase shares of Common Stock(185)(229)
Dividends paid on Common Stock(207)(198)
Other, net(25)(35)
Net Cash Used in Financing Activities (375)(443)
Effect of Exchange Rate on Cash and Cash Equivalents5 10 
Net Decrease in Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents(34)(25)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - Beginning of Period923 807 
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - End of Period$889 $782 
See accompanying notes.

11

Reconciliation of Non-GAAP Measurements to GAAP Results
(amounts in millions, except per share amounts)
(unaudited)
 
In addition to the results provided in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP"), the Company provides the following non-GAAP measurements.

•Diluted Earnings Per Share ("EPS") excluding Special Items (as defined below);
•Effective Tax Rate excluding Special Items;
•Core Operating Profit. Core Operating Profit excludes Special Items and foreign currency translation (“F/X”) and we use Core Operating Profit for the purposes of evaluating performance internally;
•Net Income, excluding Special Items;
•Company restaurant profit and Company restaurant margin as a percentage of sales (as defined below).

These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of these non-GAAP measurements provide additional information to investors to facilitate the comparison of past and present operations.

Special Items are not included in any of our Division segment results as the Company does not believe they are indicative of our ongoing operations due to their size and/or nature. Our chief operating decision maker does not consider the impact of Special Items when assessing segment performance. The Special Items are described in (a) - (d) in the accompanying notes.

Company restaurant profit is defined as Company sales less Company restaurant expenses, both of which appear on the face of our Condensed Consolidated Statements of Income. Company restaurant expenses include those expenses incurred directly by our Company-owned restaurants in generating Company sales, including cost of food and paper, cost of restaurant-level labor, rent, depreciation and amortization of restaurant-level assets and advertising expenses incurred by and on behalf of that Company restaurant. Company restaurant margin as a percentage of sales ("Company restaurant margin %") is defined as Company restaurant profit divided by Company sales. We use Company restaurant profit for the purposes of internally evaluating the performance of our Company-owned restaurants and we believe Company restaurant profit provides useful information to investors as to the profitability of our Company-owned restaurants. In calculating Company restaurant profit, the Company excludes revenues and expenses directly associated with our franchise operations as well as non-restaurant-level costs included in General and administrative expenses, some of which may support Company-owned restaurant operations. The Company also excludes restaurant-level asset impairment and closures expenses, which have historically not been significant, from the determination of Company restaurant profit as such expenses are not believed to be indicative of ongoing operations. Further, while we generally include depreciation and amortization of restaurant-level assets within Divisional Company restaurant expenses used to derive Divisional Company restaurant profit, we record amortization of reacquired franchise rights arising from acquisition accounting within Corporate and Unallocated Company restaurant expenses as such amortization is not believed to be indicative of ongoing Divisional results as well as to enhance the comparability of acquired stores' margins with those of existing restaurants. Company restaurant profit and Company restaurant margin % as presented may not be comparable to other similarly titled measures of other companies in the industry.

Certain non-GAAP measurements are presented excluding the impact of F/X. These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the F/X impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.

 Quarter ended
 3/31/263/31/25
Reconciliation of GAAP Operating Profit to Core Operating Profit
Consolidated
GAAP Operating Profit$644$548
Detail of Special Items:
Charges associated with Pizza Hut Strategic Options Review (a)
37—
Charges associated with Brand HQ Consolidation (b)
17
Charges associated with Resource Optimization—17
Income from Litigation Settlement(c)
(44)—
Other Special Items (Income) Expense —2
Special Items (Benefit) Expense - Operating Profit(6)27
Positive Foreign Currency Impact on Division Operating Profit(25)N/A
Core Operating Profit$612$575
12

Special Items as shown above were recorded to the financial statement line items identified below.
Quarter ended
3/31/263/31/25
Condensed Consolidated Summary of Results Line Item
Decrease in Franchise and property revenues$—$1
Increase in General and administrative expenses3828
Increase in Other (income) expense(44)(2)
Special Items (Benefit) Expense - Operating Profit$(6)$27
KFC Division
GAAP Operating Profit$383 $331 
Negative (Positive) Foreign Currency Impact (23)N/A
Core Operating Profit$361 $331 
Taco Bell Division
GAAP Operating Profit$281 $241 
Negative (Positive) Foreign Currency Impact(1)N/A
Core Operating Profit$280 $241 
Pizza Hut Division
GAAP Operating Profit$64 $74 
Negative (Positive) Foreign Currency Impact(2)N/A
Core Operating Profit$62 $74 
Habit Burger & Grill Division
GAAP Operating Profit (Loss)$(7)$(1)
Negative (Positive) Foreign Currency Impact— N/A
Core Operating Profit (Loss)$(7)$(1)
Reconciliation of GAAP Net Income to Net Income excluding Special Items
GAAP Net Income$432 $253 
Special Items (Benefit) Expense - Operating Profit(6)27 
Special Items Tax (Benefit) Expense(d)
(8)86 
Net Income excluding Special Items$418 $366 
Reconciliation of Diluted EPS to Diluted EPS excluding Special Items
Diluted EPS $1.55 $0.90 
Less Special Items Diluted EPS0.05 (0.40)
Diluted EPS excluding Special Items$1.50 $1.30 
Reconciliation of GAAP Effective Tax Rate to Effective Tax Rate excluding Special Items
GAAP Effective Tax Rate16.2 %41.0 %
Impact on Tax Rate as a result of Special Items(1.8)%21.2 %
Effective Tax Rate excluding Special Items18.0 %19.8 %
13



Reconciliation of GAAP Operating Profit to Company Restaurant Profit
Quarter ended 3/31/2026
KFC DivisionTaco Bell DivisionPizza Hut DivisionHabit Burger & Grill DivisionCorporate and UnallocatedConsolidated
GAAP Operating Profit (Loss)$383 $281 $64 $(7)$(77)$644 
Less:
Franchise and property revenues461 251 142 3 — 856 
Franchise contributions for advertising and other services163 175 80 1 — 418 
Add:
General and administrative expenses87 53 59 13 111 322 
Franchise and property expenses19 6 17 1 — 43 
Franchise advertising and other services expense161 173 84 1 — 419 
Refranchising (gain) loss— — — — (1)(1)
Other (income) expense— 1 (3)1 (45)(45)
Company restaurant profit (loss)$26 $88 $1 $5 $(12)$107 
Company sales$255 $372 $32 $126 $— $785 
Company restaurant margin %10.3 %23.6 %1.8 %3.7 %N/A13.7 %

Quarter ended 3/31/2025
KFC DivisionTaco Bell DivisionPizza Hut DivisionHabit Burger & Grill DivisionCorporate and UnallocatedConsolidated
GAAP Operating Profit (Loss) $331 $241 $74 $(1)$(98)$548 
Less:
Franchise and property revenues407 234 143 2 (1)785 
Franchise contributions for advertising and other services149 160 85 1 — 395 
Add:
General and administrative expenses80 49 55 13 105 302 
Franchise and property expenses16 6 11 1 — 34 
Franchise advertising and other services expense149 157 89 1 — 396 
Refranchising (gain) loss— — — — (5)(5)
Other (income) expense— — (2)— (6)(8)
Company restaurant profit (loss)$20 $59 $— $11 $(3)$87 
Company sales$216 $263 $3 $125 $— $607 
Company restaurant margin % 9.3 %22.4 %(6.1)%8.6 %N/A14.3 %

14

YUM! Brands, Inc.
Segment Results
(amounts in millions)
(unaudited)

    
Quarter ended 3/31/2026KFC DivisionTaco Bell DivisionPizza Hut DivisionHabit Burger & Grill DivisionCorporate and UnallocatedConsolidated
Total revenues$879 $797 $253 $130 $— $2,059 
Company restaurant expenses229 284 31 121 12 677 
General and administrative expenses87 53 59 13 111 322 
Franchise and property expenses19 6 17 1 — 43 
Franchise advertising and other services expense161 173 84 1 — 419 
Refranchising (gain) loss— — — — (1)(1)
Other (income) expense— 1 (3)1 (45)(45)
Total costs and expenses, net496 517 189 137 77 1,415 
Operating Profit (Loss)$383 $281 $64 $(7)$(77)$644 

Quarter ended 3/31/2025KFC DivisionTaco Bell DivisionPizza Hut DivisionHabit Burger & Grill DivisionCorporate and UnallocatedConsolidated
Total revenues$773 $657 $231 $128 $(1)$1,787 
Company restaurant expenses196 204 4 114 3 520 
General and administrative expenses80 49 55 13 105 302 
Franchise and property expenses16 6 11 1 — 34 
Franchise advertising and other services expense149 157 89 1 — 396 
Refranchising (gain) loss— — — — (5)(5)
Other (income) expense— — (2)— (6)(8)
Total costs and expenses, net441 416 156 129 98 1,239 
Operating Profit (Loss)$331 $241 $74 $(1)$(98)$548 


The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated Summary of Results.  Corporate and unallocated expenses comprise items that are not allocated to segments for performance reporting purposes.

The Corporate and Unallocated column in the above tables includes, among other amounts, all amounts that we have deemed Special Items. See Reconciliation of Non-GAAP Measurements to GAAP Results.


15

Notes to the Condensed Consolidated Summary of Results, Condensed Consolidated Balance Sheets
and Condensed Consolidated Statements of Cash Flows
(amounts in millions)
(unaudited)

Amounts presented as of and for the quarter ended March 31, 2026 are preliminary.

(a)In 2025, we began a review of strategic options for the Pizza Hut brand. During the quarter ended March 31, 2026, we recorded charges of approximately $37 million to Corporate and unallocated General and administrative expenses, which primarily included third-party advising costs associated with this strategic options review. Given the significance of the costs expected to be incurred through the course of this strategic options review, we have reflected such amounts as Special Items.

(b)In the first quarter of 2025, we decided to designate two brand headquarters in the U.S., located in Plano, Texas and Irvine, California, to foster greater collaboration among brands and employees. This involved relocating the KFC U.S. corporate office to the KFC Global headquarters and requiring the majority of our U.S.-based remote employees to relocate to an appropriate headquarter office. We also decided to relocate our YUM Corporate headquarters to a new space in Louisville, Kentucky and accordingly, donated our existing space. Costs incurred to date primarily include severance for the employees who chose not to relocate and consultant fees. As a result of these decisions, we recorded charges of approximately $1 million and $7 million during the quarters ended March 31, 2026 and 2025, respectively, to Corporate and unallocated General and administrative expenses. Due to their scope and size, these charges have been reflected as Special Items.

(c)During the quarter ended March 31, 2026, we received approximately $44 million, net of legal expenses, related to a credit card interchange fee litigation settlement in which we were a plaintiff. This settlement was recorded to Unallocated Other (income) expense. Due to the nature and size of the settlement, including the years to which the litigation related, it has been reflected as a Special Item within Other income.

(d)The below table includes the detail of Special Items Tax (Benefit) Expense:

Quarter ended
3/31/263/31/25
Tax Expense (Benefit) on Special Items (Benefit) Expense - Operating Profit$2 $(7)
Tax Expense - Foreign tax reserve— 92 
Tax (Benefit) - Intra-entity transfers and valuations of intellectual property
(22)— 
Tax Expense - Other Income tax impacts recorded as Special13 — 
Special Items Tax (Benefit) Expense
$(8)$86 

Tax Expense (Benefit) on Special Items (Benefit) Expense - Operating Profit was determined by assessing the tax impact of each individual component within Special Items based upon the nature of the item and jurisdictional tax law.

Tax (Benefit) - Intra-entity transfers and valuations of intellectual property in the quarter ended March 31, 2026, reflects the tax benefit resulting from an internal reorganization to consolidate the Pizza Hut entities and assets into two isolated ownership structures by aligning the legal ownership, simplifying the organizational footprint and consolidating the Pizza Hut domestic and international business. As part of this reorganization, certain Pizza Hut intellectual property ("IP") rights from subsidiaries in the U.S. were transferred to international subsidiaries resulting in a step-up in amortizable tax basis of those IP rights. This reorganization began in the fourth quarter of 2025 in connection with our Pizza Hut strategic options review.

Tax Expense - Other Income tax impacts recorded as Special in the quarter ended March 31, 2026, includes a $13 million adjustment to tax expense associated with our decision to exit Russia. Previously recorded impacts associated with our decision to exit Russia were recorded as Special Items.

Tax Expense - Foreign tax reserve in the quarter ended March 31, 2025, is associated with a reserve, and the related ongoing foreign exchange and inflationary adjustments, associated with a change in management's judgment around a Mexican subsidiary's ability to utilize losses to offset recapture gains triggered by a historical tax deconsolidation in Mexico. This expense was reflected as a Special Item due to its size and the time elapsed since the years to which the reserve relates.
16

Source: View Original Filing on SEC EDGAR

FAQ

How did Yum! Brands (YUM) perform financially in Q1 2026?

Yum! Brands delivered strong Q1 2026 results, with revenue up 15% to $2.06 billion and net income rising 71% to $432 million. Diluted EPS reached $1.55, while EPS excluding Special Items increased 15% to $1.50, reflecting broad-based operating profit growth.

What were Yum! Brands’ key same-store and system sales metrics in Q1 2026?

Worldwide system sales grew 6% excluding foreign currency, and same-store sales increased 3%. Taco Bell led with 8% same-store sales growth and 10% system sales growth, while KFC delivered 6% system sales growth. Pizza Hut’s system sales were flat excluding currency, with mixed regional trends.

How are Yum! Brands’ major divisions performing, especially Taco Bell, KFC and Pizza Hut?

Taco Bell and KFC showed strong momentum. Taco Bell operating profit rose 16% to $281 million, with 8% same-store sales growth. KFC operating profit grew 16% to $383 million, with 7% unit growth. Pizza Hut operating profit fell 14% to $64 million, and U.S. system sales declined.

What role did digital sales play in Yum! Brands’ Q1 2026 results?

Digital channels were a major growth driver. Digital system sales approached $11 billion in Q1 2026, with a record 63% of system sales coming through digital transactions. This reflects increasing consumer adoption of mobile, web and kiosk ordering across Yum! Brands’ global restaurant base.

What are Yum! Brands’ long-term financial targets going forward?

Yum! Brands targets average long-term unit growth of 5%, system sales growth of 7% excluding foreign currency, and at least 8% Core Operating Profit growth. These goals, first announced in 2022, frame management’s expectations for sustained expansion across its global franchise portfolio.

How did special items affect Yum! Brands’ Q1 2026 results?

Special Items benefited results in Q1 2026. The company recorded about $37 million of Pizza Hut strategic review costs and a $44 million litigation settlement, net of expenses. Net income excluding Special Items was $418 million, while EPS excluding Special Items was $1.50 versus reported EPS of $1.55.

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