YUM

A month has gone by since the last earnings report for Shake Shack (SHAK). Shares have lost about 1.3% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Shake Shack due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Shake Shack, Inc. before we dive into how investors and analysts have reacted as of late. Shake Shack reported second-quarter fiscal 2026 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line increased year over year, while adjusted earnings declined.The company reported solid demand, with same-Shack sales increasing 3.5% and traffic rising 2%. New Shack openings supported double-digit revenue growth, but record-high beef costs and higher operating expenses weighed on restaurant-level margins. For the fiscal second quarter, the company reported adjusted earnings of 43 cents per share, beating the Zacks Consensus Estimate of 31 cents by 38.71%. Adjusted earnings declined 2.3% from 44 cents per share in the prior-year quarter.Quarterly revenues of $417.6 million missed the consensus mark of $418 million by 0.04%. The top line increased 17.2% from $356.5 million reported in the year-ago quarter. In the fiscal second quarter, Shack sales increased 17.5% year over year to $403.4 million from $343.2 million. Our estimate for the metric was 412 million.Licensing revenues rose 7.1% to $14.2 million from $13.2 million. Our estimate for the metric was 13.7 million.System-wide sales advanced 13.8% to $625.8 million. Average weekly sales were approximately $78,000, unchanged from the prior-year quarter.Management estimated that the World Cup contributed approximately 90 basis points to comparable sales. In-Shack menu pricing increased 3.7%, while blended pricing across all channels rose 4.4%. Comparable app channel sales grew nearly 30% year over year, and digital sales represented almost 41% of Shack sales. In the fiscal second quarter, restaurant-level profit increased 12.8% year over year to $92.7 million from approximately $82.2 million. However, restaurant-level profit margin contracted 90 basis points to 23% of Shack sales from 23.9%.Food and paper costs increased 20.3% year over year to $116.3 million from $96.6 million. As a percentage of Shack sales, these expenses rose 60 basis points year over year to 28.8%, reflecting higher commodity costs, promotional activity and a shift toward higher-cost menu items.Beef, which represents approximately 35% of the food and paper basket, experienced mid-teens inflation. Total blended food and paper inflation was in the low-single-digit range during the quarter. Labor and related expenses increased 15% year over year to $101.2 million. Other operating expenses in the fiscal second quarter increased 24.3% year over year to $63.1 million and rose 80 basis points year over year to 15.6% of Shack sales. The increase primarily reflected higher delivery commissions. Occupancy expenses increased 17.8% year over year to $30.2 million.Operating income declined 7.3% year over year to $20.7 million. Our estimate for the metric was $23.9 million.Net income attributable to Shake Shack decreased 8.6% year over year to $15.7 million. Our estimate for the metric was $17.5 million.Adjusted EBITDA increased 3.9% year over year to $61.2 million from $58.9 million reported in the year-ago quarter. However, the adjusted EBITDA margin contracted 180 basis points year over year to 14.7%.General and administrative expenses rose 18.8% year over year to $48.3 million. Depreciation and amortization increased 15.7% year over year to $30.7 million, while preopening costs climbed 34% to $6.6 million. Shake Shack opened 16 company-operated Shacks during the quarter, up 23.1% from 13 openings in the prior-year period. This marked the company’s strongest second-quarter development performance on record and brought year-to-date company-operated openings to 33.The company opened 11 licensed Shacks, up 22.2% from nine a year earlier, and closed three locations. This resulted in eight net licensed additions.The system-wide Shack count increased 15.2% year over year to 703 from 610. Licensing sales rose 7.6% to $222.4 million from $206.7 million, supported by U.S. airports, Canada, the United Kingdom and parts of China.Continued conflict in the Middle East pressured the United Arab Emirates, historically Shake Shack’s highest-volume market in the region. The company maintained its target of 60-65 company-operated openings and 40-45 licensed openings in fiscal 2026. Shake Shack ended the quarter with $308 million in cash and cash equivalents, down 8.6% from $336.8 million a year earlier. Net cash provided by operating activities for the first half declined 32% year over year to $65.5 million.Management maintained its full-year outlook but expects adjusted EBITDA and net income to finish at the low end of their respective guidance ranges. Beef inflation, tougher comparisons and competitive intensity are expected to remain headwinds in the second half.For 2026, Shake Shack expects total revenues of $1.6 billion to $1.7 billion and licensing revenues of $57 million to $59 million. Same-Shack sales are projected to increase in the low-single-digit percentage range from 2025.The company expects a restaurant-level profit margin of 22% to 23%. General and administrative expenses are projected at 12% to 13% of total revenues. Depreciation and amortization expenses are forecast between $124 million and $128 million. Preopening costs are expected in the range of $26 million to $28 million.Shake Shack projects net income of $45 million to $55 million and adjusted EBITDA of $225 million to $235 million. Management expects both measures to finish at the low end of their respective guidance ranges. The adjusted pro forma tax rate is projected between 25% and 27%. In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -7.33% due to these changes. At this time, Shake Shack has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Shake Shack has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Shake Shack belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Yum Brands (YUM), has gained 0.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Yum reported revenues of $2.17 billion in the last reported quarter, representing a year-over-year change of +12.2%. EPS of $1.62 for the same period compares with $1.44 a year ago. Yum is expected to post earnings of $1.55 per share for the current quarter, representing a year-over-year change of -1.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -2%. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for Yum. Also, the stock has a VGM Score of F. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Shake Shack, Inc. (SHAK) : Free Stock Analysis Report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Yum! Brands, Inc.? Here are five stocks we like better. Yum! Brands reported solid Q2 growth excluding Pizza Hut, with 7% system sales growth, 4% same-store sales growth, 8% core operating-profit growth and digital sales reaching 61% of sales. Pizza Hut’s sale to Yum China and LongRange Capital is expected to close in August for $2.7 billion, generating approximately $2.3 billion in net proceeds that Yum! plans to use partly for debt reduction and largely for potential share repurchases. Taco Bell’s U.S. sales were temporarily hurt by a food-safety issue, but management said sales have begun recovering; meanwhile, KFC delivered 6% system sales growth and remains a major global expansion driver, supported by a potential 20,000-unit opportunity in underpenetrated markets. Domino's Stock Slides to 52-Week Low as Investors Digest CEO Change Yum! Brands (NYSE:YUM) reported second-quarter growth across its operations excluding Pizza Hut, while management addressed a recent U.S. food-safety issue that has temporarily affected Taco Bell sales and outlined plans to sell Pizza Hut in separate transactions. Chief Executive Officer Chris Turner said consumer safety remains the company’s top priority and that Yum!’s teams have acted “quickly and transparently” in response to the industry-wide issue. He said Taco Bell has experienced a meaningful near-term sales impact but expects the effect to be temporary. → Microsoft Just Flipped the AI Spending Narrative Overnight Top Consumer Discretionary Brands Add Buyback Capacity Amid Weakness Excluding Pizza Hut, Yum! reported 7% system sales growth in the second quarter, supported by 6% unit growth and 4% same-store sales growth. Core operating profit increased 8%, according to Chief Financial Officer Ranjith Roy. Digital sales excluding Pizza Hut approached $9 billion during the quarter and represented 61% of sales. Yum! completed its strategic review of Pizza Hut in June and entered separate agreements to sell the business to Yum China and LongRange Capital. The transactions are valued at $2.7 billion in aggregate, with the potential for an additional $75 million earn-out from LongRange Capital by 2030. → 2 Unique Space ETFs That Could Upend the Industry MarketBeat Week in Review – 06/01 - 06/05 Roy said Yum! expects both transactions to close in August. Afterward, Yum! will provide transition services to Pizza Hut outside China, including enterprise technology and finance support. Most of those services are expected to phase out during 2027. The company expects to receive about $2.3 billion in net proceeds from the transactions. Yum! plans to use a portion to pay down its revolver balance and expects to reserve most of the remaining proceeds for share repurchases, subject to market conditions. Yum! repurchased approximately $670 million of stock during the first half of 2026. → MarketBeat Week in Review – 07/27- 07/31 Turner said the sale would create “a stronger Yum! and a stronger Pizza Hut” and allow Yum! to focus on its remaining brands and priorities, including consumer relevance, restaurant economics and digital capabilities. KFC, which represented 58% of Yum!’s divisional operating profit excluding Pizza Hut, delivered 6% system sales growth in the quarter. The gain reflected 7% unit growth and 2% same-store sales growth. KFC opened 660 gross new stores across 55 markets during the quarter. Roy said the brand is expected to have its best development year ever, supported by franchisee confidence and opportunities in both established and underpenetrated markets. The Middle East reached 1,500 KFC restaurants during the quarter. Management highlighted growth opportunities in India, Southeast Asia, West Africa and Brazil, which together represent more than one-third of the global population. KFC’s restaurant density in those markets is approximately one-fifth of that in its top 25 markets, representing what Roy described as a 20,000-unit opportunity. KFC is also pursuing a global strategy centered on boneless chicken, sauces, updated restaurant experiences and a refreshed visual identity. Turner said the brand aims to bring core elements of the strategy to its top 20 markets by the end of 2027. In the United Kingdom, KFC’s Pickle Mania limited-time offering helped drive 8% same-store sales growth in the second quarter, while Asia delivered 6% same-store sales growth. Turner said KFC’s long-term objective is to improve same-store sales growth and average unit volumes. He said the company has seen early evidence of progress in markets including the United Kingdom, Korea, Japan and Brazil. Taco Bell generated 7% same-store sales growth in the second quarter, outperforming the quick-service restaurant industry for the ninth consecutive quarter, according to Turner. Its digital sales mix reached 47%, up five percentage points from a year earlier, with more than half of the growth coming from first-party loyalty channels. More recently, Taco Bell’s U.S. same-store sales were down 2% quarter-to-date through July 27, Roy said. He noted that the figure included a period of normal growth before the food-safety issue became prominent and that the largest sales impact occurred over the weekend of July 18. Roy said sales declines had moderated materially since then. Based on the four most recent days discussed on the call, Taco Bell had recovered about halfway to prior-year sales levels. He said the company expects Taco Bell’s third-quarter equity restaurant-level margins to range from 19% to 21%, reflecting lower sales volumes, promotional investments and a higher concentration of company-operated restaurants in more affected markets. Turner said Taco Bell’s social-sentiment measures had returned to pre-issue levels of positivity and that the company has seen no decline in measures of brand love. He pointed to the brand’s recent promotional activity, including $1 Enchirito and Mexican Pizza loyalty offers, as examples of efforts to reengage customers. The Mexican Pizza promotion produced the highest app traffic, app transactions and loyalty acquisitions of any Taco Bell Tuesday drop, he said. Taco Bell plans to introduce a redesigned app during the third quarter, with more personalized features, improved menu discovery and expanded order customization. Internationally, the brand recently launched Baja Blast in the United Kingdom, where the first week of the launch helped lift same-store sales by 14%, Turner said. Yum! continues to expand Byte, its proprietary AI-enabled technology platform, across its restaurant system. Roy said Byte allows restaurant operators to manage menus, pricing, promotions and store hours through a single platform across ordering channels. Taco Bell has deployed Voice AI capabilities to more than 900 U.S. restaurants, with additional franchisees adopting the technology. Yum! ultimately aims for Byte to support the vast majority of system sales outside China. The company said more than 400 specialized AI agents have been created internally to address business tasks, while daily usage of AI productivity tools by corporate employees has increased more than 50% year over year. Yum!’s Collider agency has also developed an innovation database containing information on more than 7,000 food, beverage and marketing concepts across 35 countries. Looking ahead, management said it remains focused on its “Raise the B.A.R.” strategy: battling for the future consumer, accelerating restaurant unit economics and expanding the company’s technology and digital capabilities. Yum! Brands, Inc (NYSE: YUM) is a global quick-service restaurant company that develops, operates and franchises a portfolio of well-known restaurant brands. The company's principal brands are KFC, Pizza Hut and Taco Bell, each focused on distinct product categories—KFC on fried chicken and related menu items, Pizza Hut on pizza and complementary offerings, and Taco Bell on Mexican-inspired quick-service food. Yum! is headquartered in Louisville, Kentucky and was formed as Tricon Global Restaurants in 1997 when PepsiCo spun off its restaurant businesses, later adopting the Yum! Brands name. The company's operating model centers on brand development, system growth and franchising; a large portion of its restaurants are operated by independent franchisees, and Yum! generates revenue through franchise royalties and fees in addition to sales from company-operated locations. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Yum! Brands Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

For the quarter ended June 2026, Yum Brands (YUM) reported revenue of $2.17 billion, up 12.2% over the same period last year. EPS came in at $1.62, compared to $1.44 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $2.18 billion, representing a surprise of -0.55%. The company delivered an EPS surprise of +1.89%, with the consensus EPS estimate being $1.59. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Yum performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: System same-store sales - Habit Burger Grill Division: 3% versus the five-analyst average estimate of 1.4%. System same-store sales - Taco Bell Division - YoY change: 7% versus the five-analyst average estimate of 5.7%. Number of restaurants - Company-owned - Habit Burger Grill Division: 304 compared to the 312 average estimate based on five analysts. Number of restaurants - Franchise & License - Habit Burger Grill Division: 84 versus 83 estimated by five analysts on average. Revenues- Franchise and property revenues: $895 million compared to the $894.76 million average estimate based on five analysts. The reported number represents a change of +7.2% year over year. Revenues- Taco Bell Division- Franchise and property revenues: $271 million versus the five-analyst average estimate of $264.68 million. The reported number represents a year-over-year change of +9.3%. Revenues- Pizza Hut Division: $254 million compared to the $261.49 million average estimate based on five analysts. The reported number represents a change of +6.3% year over year. Revenues- Taco Bell Division: $853 million versus the five-analyst average estimate of $836.13 million. The reported number represents a year-over-year change of +20%. Revenues- Franchise contributions for advertising and other services: $438 million versus the five-analyst average estimate of $456.63 million. The reported number represents a year-over-year change of +2.3%. Revenues- KFC Division- Franchise contributions for advertising and other services: $172 million compared to the $182.78 million average estimate based on five analysts. The reported number represents a change of +3% year over year. Revenues- Habit Burger Grill Division: $139 million versus the five-analyst average estimate of $135.66 million. The reported number represents a year-over-year change of +3.7%. Revenues- Pizza Hut Division- Franchise contributions for advertising and other services: $80 million compared to the $86.18 million average estimate based on five analysts. The reported number represents a change of -5.9% year over year. View all Key Company Metrics for Yum here>>> Shares of Yum have returned -4.7% over the past month versus the Zacks S&P 500 composite's -0.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Yum! Brands recently reported second-quarter 2026 results showing revenue of US$2,169 million and net income of US$853 million, while also reaching definitive agreements to sell its Pizza Hut business and concluding a portfolio review aimed at sharpening focus on its remaining brands. The company’s decision to exit Pizza Hut, alongside strong earnings and a food-safety setback at Taco Bell, highlights how portfolio reshaping, operational execution and brand risks are all converging for investors to assess. Next, we’ll examine how selling Pizza Hut while reporting stronger earnings may reshape Yum! Brands’ longer-term investment narrative and risk profile. Find 56 companies with promising cash flow potential yet trading below their fair value. For Yum! Brands, I think the key belief for shareholders is that a focused KFC and Taco Bell portfolio, supported by technology and franchising, can compound earnings over time. The Pizza Hut sale and strong Q2 2026 results reinforce that focus, while the Taco Bell food safety issue looks like the main near term swing factor for sentiment and sales. The biggest ongoing risk is how quickly the company can protect and grow brand relevance in key markets. The most relevant development here is Yum! Brands’ decision to sell Pizza Hut after its strategic review, which closes a long running source of uncertainty. With Pizza Hut exiting, investors’ attention is likely to concentrate even more on KFC’s international performance and Taco Bell’s recovery, as well as on how effectively Yum! deploys its Byte digital platform and other technology investments to support franchisee economics. Yet even as Yum! leans into tech and a tighter brand set, investors should be aware that... Read the full narrative on Yum! Brands (it's free!) Yum! Brands' narrative projects $10.4 billion revenue and $2.2 billion earnings by 2029. This requires 6.9% yearly revenue growth and roughly a $0.5 billion earnings increase from $1.7 billion today. Uncover how Yum! Brands' forecasts yield a $173.71 fair value, a 11% upside to its current price. Three members of the Simply Wall St Community currently see Yum! Brands’ fair value between US$158.18 and US$174.33, underscoring how far individual views can stretch. Against that backdrop, Yum!’s heavy reliance on KFC International for profit concentration is a reminder that different assumptions about geopolitical and currency risk can materially reshape expectations, so it is worth exploring several contrasting viewpoints before deciding how this business might fit in your portfolio. Explore 3 other fair value estimates on Yum! Brands - why the stock might be worth as much as 11% more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Yum! Brands research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision. Our free Yum! Brands research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Yum! Brands' overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: Uncover the next big thing with 21 elite penny stocks that balance risk and reward. The future of work is here. Discover the 34 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include YUM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Yum China Holdings YUMC gave investors a clean read on its second-quarter 2026 growth engine. Revenues rose 13% year over year, adjusted earnings per share increased 21% and operating profit rose 14% to $348 million.The question now is whether transaction gains, rapid unit development and brand innovation can keep momentum intact while value pricing, smaller tickets and rising delivery costs pressure store-level economics. KFC and Pizza Hut both contributed to the quarterly beat. KFC system sales increased 7%, while Pizza Hut system sales rose 6%, with both brands generating 1% same-store sales growth. Yum China price-consensus-chart | Yum China Quote KFC remains the company’s main earnings engine, with second-quarter revenues of $2.34 billion and operating profit of $332 million. Pizza Hut is building a broader mass-market platform through value offerings, new formats and product extensions that widened traffic appeal. Yum China recorded its 14th consecutive quarter of same-store transaction growth, a useful signal in a market where consumers remain price-sensitive. Companywide same-store transactions rose 5%, helping offset lower average tickets.At KFC, same-store transactions increased 4% while average ticket declined 3%. Pizza Hut showed a more pronounced trade-off, with transactions up 13% and ticket down 11%, showing how traffic gains compensated for smaller average orders. Unit growth remains central to the investment case. Yum China opened 560 net new stores in the second quarter and 1,196 in the first half of 2026, lifting its total footprint to 19,297 locations as of June 30.Flexible formats, lower average capital requirements and broader franchise participation are supporting expansion. Franchisees accounted for 41% of second-quarter openings, and management remains on track to exceed 20,000 stores in 2026 while targeting more than 30,000 by 2030. Yum China is also using side-by-side concepts to stretch existing brands into more dayparts and occasions. KCOFFEE Cafe has reached more than 3,300 locations and generated a mid-single-digit sales uplift at parent KFC stores.KPRO exceeded 450 locations and delivered an approximately 20% uplift, supporting demand for lighter meals and new consumption occasions. Pizza Hut Burger Bar, now in more than 200 locations, is designed to capture burger and solo-dining demand while adding incremental sales to parent restaurants. Delivery sales increased 26% in the quarter and represented about 54% of company sales, up from 45% a year earlier. That mix brings convenience and reach, but rider expenses reduced restaurant margin by about 140 basis points.Yum China offset most of that pressure through streamlined operations, labor productivity and lower occupancy expenses. Operating margin expanded 20 basis points to 11.1%, marking the ninth straight quarter of expansion, while restaurant margin held flat at 16.1%. The bottom line is that Yum China’s second-quarter results showed traffic-led growth, disciplined expansion and brand extensions working at the same time. The long-term thesis still depends on whether traffic can keep offsetting ticket compression and whether delivery economics can remain manageable.YUMC currently carries a Zacks Rank #2 (Buy). The stock also has a VGM Score of A, along with a Value Score of B, Growth Score of B and Momentum Score of B, a combination that points to favorable traits across valuation, earnings growth and price trend measures. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Restaurant investors can also compare Yum China with Yum! Brands YUM, the global operator of KFC, Pizza Hut, Taco Bell and Habit Burger & Grill, and Darden Restaurants DRI, a full-service dining operator with brands such as Olive Garden and LongHorn Steakhouse. YUMC’s case is more directly tied to China traffic recovery, store density and delivery execution, making those operating metrics critical to watch after the earnings beat. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Yum China (YUMC) : Free Stock Analysis Report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report Darden Restaurants, Inc. (DRI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Yum! Brands, Inc. YUM delivered second-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues missed the same. Adjusted earnings of $1.62 per share increased 12.5% year over year and beat the consensus mark of $1.59 by 1.9%. Revenues rose 12.2% to $2.17 billion but fell short of the estimate of $2.18 billion by 0.6%. Results benefited from Taco Bell’s 7% same-store sales growth, while worldwide system sales increased 5% excluding foreign currency translation. Worldwide same-store sales increased 3% in the quarter. The company’s restaurant count rose 5% year over year, supported by 1,053 gross new unit openings. Excluding Pizza Hut, system sales increased 7% excluding foreign currency translation. Unit count grew 6%, same-store sales rose 4% and core operating profit advanced 8%. Digital system sales excluding Pizza Hut approached $9 billion, with digital transactions accounting for more than 60% of system sales. Yum! Brands, Inc. price-consensus-eps-surprise-chart | Yum! Brands, Inc. Quote KFC generated second-quarter revenues of $924 million, up 9% from $849 million in the prior-year period. System sales rose 6% excluding foreign currency translation, while same-store sales increased 2%. Operating profit climbed 13% to $410 million. Core operating profit increased 9% after excluding currency effects. Operating margin expanded 160 basis points to 44.3%, although company-owned restaurant margin declined 10 basis points to 12%. KFC opened 660 gross new restaurants across 55 countries, lifting its restaurant base 7% to 34,747. System sales advanced 20% in the Middle East, Turkey and North Africa, 16% in India and 10% in both Asia and Latin America. Taco Bell revenues surged 20% year over year to $853 million. System sales increased 9%, supported by a 7% rise in same-store sales. U.S. system sales grew 9%, while domestic same-store sales increased 7%. International system sales advanced 13% excluding foreign currency translation, and international same-store sales rose 5%. Operating profit increased 19% to $311 million. Company-owned restaurant margin expanded 160 basis points to 25.9%, reflecting stronger restaurant-level profitability. However, operating margin contracted 40 basis points to 36.4%. Taco Bell opened 54 gross new restaurants across 15 countries. Its restaurant count increased 3% to 9,046. Pizza Hut revenues increased 6% to $254 million. Company sales rose to $31 million from $7 million, while franchise and property revenues declined 3% to $143 million. Underlying sales remained pressured. System sales fell 2% excluding foreign currency translation, while same-store sales declined 1%. U.S. system sales decreased 5% and international system sales were flat. Operating profit fell 12% to $70 million, while core operating profit declined 14%. Operating margin contracted 590 basis points to 27.6%. Pizza Hut opened 333 gross new restaurants across 33 countries, taking the restaurant count 1% higher to 19,985. YUM entered two definitive agreements to sell Pizza Hut, bringing the strategic review of the brand to a close. LongRange Capital will acquire Pizza Hut outside Mainland China, while Yum China will purchase the Mainland China operations. The company classified $746 million of assets and $262 million of liabilities as held for sale at the end of the quarter. YUM expects the transactions to provide Pizza Hut with ownership structures tailored to its regional markets and long-term priorities. Management also unveiled a refreshed KFC strategy focused on boneless chicken, beverages and sauces. The company aims to introduce the strategy’s core elements across KFC’s top 20 markets by the end of 2027. GAAP operating profit increased 5% to $655 million. Core operating profit also rose 5% to $683 million after excluding special items and foreign currency effects. Company sales advanced 25% to $837 million, while franchise and property revenues increased 7% to $895 million. General and administrative expenses rose 7% to $324 million. GAAP earnings were $3.08 per share, up from $1.33 in the prior-year quarter. The reported figure included special-item tax benefits related mainly to the planned Pizza Hut sale and internal intellectual property transactions. Net cash provided by operating activities totaled $923 million during the first half of 2026, up from $850 million a year earlier. Capital expenditures increased to $175 million from $142 million. The company repurchased $674 million of common stock and paid $413 million in dividends. Cash and cash equivalents were $674 million as of June 30, 2026, while long-term debt totaled $9.46 billion and short-term borrowings were $2.81 billion. YUM continues to target long-term average growth of 5% in units, 7% in system sales excluding currency movements and at least 8% in core operating profit. YUM currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the Zacks Retail-Wholesale sector: Five Below, Inc. FIVE presently sports a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 70.1%, on average. FIVE stock has gained 4.4% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for Five Below’s 2026 sales and EPS indicates growth of 15.1% and 36.1%, respectively, from the year-ago period’s levels. FIGS, Inc. FIGS has a Zacks Rank #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 212.5%, on average. FIGS stock has declined 4.9% in the past six months. The Zacks Consensus Estimate for FIGS’ 2026 sales and EPS indicates growth of 15.5% and 36.8%, respectively, from the prior-year levels. Dutch Bros Inc. BROS carries a Zacks Rank of 2 at present. The company delivered a trailing four-quarter earnings surprise of 31.6%, on average. BROS stock has increased 15.8% in the past six months. The Zacks Consensus Estimate for Dutch Bros’ 2026 sales and EPS indicates growth of 27% and 23.7%, respectively, from the prior-year levels. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report Five Below, Inc. (FIVE) : Free Stock Analysis Report FIGS, Inc. (FIGS) : Free Stock Analysis Report Dutch Bros Inc. (BROS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Restaurant companies are likely to have benefited from resilient consumer demand for dining out during the second quarter of 2026 despite a still-uncertain economic backdrop. Quick-service and fast-casual chains are likely to have been aided by compelling value offerings, limited-time menu launches and product innovation that encouraged customer visits. Continued growth in digital ordering, loyalty programs and delivery channels is likely to have boosted customer engagement and repeat purchases, while selective menu price increases are expected to have supported average check growth without causing a significant decline in demand. The industry's top line is also likely to have been supported by new restaurant openings and ongoing franchise expansion, particularly among brands with strong development pipelines. Investments in drive-thru operations, mobile ordering and other convenience-focused initiatives are likely to have enhanced customer experience and increased sales opportunities. Additionally, international markets are likely to have contributed positively for globally diversified operators, while easing food inflation might have provided greater flexibility in pricing strategies, helping sustain revenue momentum. Despite these positives, restaurant industry revenues are likely to have been weighed down by cautious consumer spending, particularly among lower-income households facing continued pressure from higher living costs. Many consumers are expected to have reduced dining frequency, traded down to lower-priced menu items, or shifted more of their spending toward at-home meals. Casual dining operators are expected to have been more exposed to softer traffic trends, while an intensely promotional environment might have limited pricing gains. In addition, unfavorable weather in certain regions, foreign-currency headwinds for global restaurant companies and lingering macroeconomic uncertainty are likely to have moderated overall revenue growth during the quarter. Restaurant companies' bottom lines are likely to have been supported by easing commodity inflation, which might have lowered input cost pressures compared with the prior year. Continued menu price increases, an improved sales mix and higher digital orders are likely to have helped protect restaurant-level margins. Many operators are also expected to have benefited from ongoing productivity initiatives, automation and supply-chain efficiencies that helped offset operating expenses. However, earnings growth is likely to have been capped by elevated labor costs, including higher wages and employee benefits, as operators continued to compete for workers. Increased marketing and promotional spending to drive customer traffic, along with investments in technology, restaurant remodels and new unit expansion, might also have weighed on margins. Additionally, foreign exchange headwinds and occupancy-related costs are likely to have limited bottom-line improvement for several global restaurant companies. Companies in the broader Retail-Wholesale sector, such as Yum! Brands, Inc. YUM, Yum China Holdings, Inc. YUMC and BJ's Restaurants, Inc. BJRI, are set to report their second-quarter earnings on July 30, 2026. Amid a number of stocks, to identify those with the potential to beat earnings estimates, the following Zacks methodology can be used. The Zacks model suggests that a company needs to have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Yum! Brands is scheduled to report second-quarter 2026 earnings before the opening bell. The company’s second-quarter 2026 top line is likely to have been aided by sustained momentum at Taco Bell, where compelling value offerings, menu innovation and healthy customer traffic are expected to have supported sales growth. KFC is also likely to have benefited from product innovation, expanding sauce and beverage platforms, and robust international unit growth. Continued restaurant expansion, rising digital sales, broader loyalty adoption and the ongoing rollout of the Byte technology platform are also likely to have supported higher system sales during the quarter.Yum! Brands' second-quarter 2026 bottom line is likely to have been aided by improved restaurant-level margins at Taco Bell and KFC, supported by favorable sales leverage and disciplined cost management. Ongoing productivity initiatives, AI-driven operational efficiencies and greater adoption of the Byte technology platform are also likely to have enhanced profitability. Additionally, continued franchise expansion, contributions from company-operated Taco Bell restaurants acquired last year and Yum! Brands' asset-light business model are likely to have supported earnings growth during the quarter.The Zacks Consensus Estimate for YUM’s second-quarter 2026 revenues is pegged at $2.18 billion, indicating growth of 12.8% from the year-ago figure. Earnings per share are pegged at $1.59, indicating growth of 10.4% from $1.44 reported in the year-ago quarter. The company has an Earnings ESP of -0.63% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Yum! Brands, Inc. price-eps-surprise | Yum! Brands, Inc. Quote Yum China is scheduled to report results before the opening bell. The company’s second-quarter 2026 top line is likely to have been aided by continued expansion of its restaurant network, supported by new KFC and Pizza Hut store openings and growing franchise contributions. Healthy same-store transaction growth, menu innovation, compelling value offerings and limited-time promotions are also likely to have supported customer traffic. In addition, the rapid expansion of KCOFFEE and KPRO formats, improving digital capabilities, delivery services and car-side pickup initiatives are likely to have boosted sales, while management expects sequential improvement in same-store sales during the quarter.Yum China's second-quarter 2026 bottom line is likely to have been aided by ongoing operational efficiency initiatives, including streamlined store operations, automation, lower occupancy costs and disciplined G&A spending. Continued margin improvement at Pizza Hut, driven by expanding higher-margin store formats and franchise growth, is also likely to have supported profitability. While elevated rider costs tied to higher delivery sales remained a headwind, management expects restaurant margin comparisons to have improved sequentially in the second quarter, helping sustain operating profit growth.The Zacks Consensus Estimate for YUMC’s second-quarter 2026 revenues is pegged at $3.06 billion, indicating growth of 9.7% from the year-ago figure. Earnings per share are pegged at 69 cents, indicating a gain of 19% from 58 cents reported in the year-ago quarter. The company has an Earnings ESP of 0.00% and a Zacks Rank #2. Yum China price-eps-surprise | Yum China Quote BJ's Restaurants is scheduled to report results after the closing bell. The company’s second-quarter 2026 top line is likely to have been aided by sustained traffic growth, supported by menu innovation, stronger guest engagement and improving brand relevance. Continued momentum from the Pizookie Meal Deal, revamped burgers and pizza offerings, seasonal menu launches and beverage initiatives is likely to have encouraged higher guest frequency. The company is also likely to have benefited from targeted marketing during its high-volume "celebration season," improving guest satisfaction and continued outperformance compared with the broader casual dining industry.BJ's Restaurants' second-quarter 2026 bottom line is likely to have been pressured by elevated commodity inflation, particularly higher beef costs, along with increased marketing investments during the peak celebration season. Higher depreciation tied to restaurant remodels and new unit investments, as well as pre-opening expenses for upcoming restaurant openings, are also likely to have weighed on profitability. Although the company continued to pursue operational efficiencies and menu optimization, these cost pressures might have partially offset the benefits of higher sales.The Zacks Consensus Estimate for BJRI’s second-quarter 2026 revenues is pegged at $374.6 million, indicating a gain of 2.5% from the year-ago figure. Earnings per share are pegged at 87 cents, indicating a decline of 10.3% from 97 cents reported in the year-ago quarter. The company has an Earnings ESP of +7.51% and a Zacks Rank #2. BJ's Restaurants, Inc. price-eps-surprise | BJ's Restaurants, Inc. Quote Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report Yum China (YUMC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research