Yum! Brands Q3 EPS Hits $5.92 on Pizza Hut Sale Gain; Core EPS Slips 1.3% to $1.56
Yum! Brands reported third-quarter GAAP EPS of $5.92, lifted by a $1.68 billion gain on selling Pizza Hut, while EPS excluding special items slipped 1.3% to $1.56 as Taco Bell U.S. same-store sales fell 4%.
Total revenue rose 3.8% to $2.05 billion from $1.98 billion, according to the earnings release Yum! filed with an 8-K on Tuesday. Net income jumped to $1.62 billion from $397 million, and GAAP diluted EPS rose from $1.41. EPS excluding special items compared with $1.58 a year earlier.
Yum! completed the sale of Pizza Hut in mainland China to Yum China on Aug. 7 and of Pizza Hut outside mainland China to LongRange Capital on Sept. 1. Excluding Pizza Hut from both years, core operating profit grew 1% in the quarter and 6% year to date, the company said.
"Yum! has entered its next chapter of growth, having completed the divestiture of Pizza Hut," CEO Chris Turner said in the release, adding that "since the end of September, Taco Bell U.S. has been outpacing the QSR industry on same-store sales growth."
KFC keeps expanding
KFC Division system sales rose 6% excluding currency, and same-store sales grew 1%. Unit count increased 7% to 35,421 restaurants, with 878 gross new openings across 66 countries, which Yum! called record third-quarter gross development. Division operating profit rose 9.5% to $425 million, and the operating margin widened to 44.8% from 44.1%.
KFC's growth was uneven by market. System sales excluding currency rose 25% in Middle East, Turkey and North Africa, 20% in India and 12% in Asia, but fell 6% in the United States. Company-owned restaurant margins narrowed to 12.3%, which the company tied partly to 15 lower-margin stores testing its Saucy brand.
Taco Bell softens
Taco Bell Division system sales fell 2% and same-store sales declined 4%, against a 7% gain a year earlier. Division operating profit dropped 4.5% to $255 million, and its margin narrowed to 33.1% from 36.6%. Taco Bell U.S. system sales fell 3%, while Taco Bell International system sales excluding currency grew 14%.
Excluding Pizza Hut, worldwide unit count grew 7% with 955 gross new units, and digital system sales topped $9 billion with a digital mix of 64%.
Cash returned
Yum! repurchased $1.20 billion of stock and paid $616 million in dividends in the first nine months, a combined $1.82 billion. The quarterly dividend declared was $0.75 per share, up from $0.71. The company kept its long-term targets of 5% unit growth, 7% system sales growth excluding currency and at least 8% core operating profit growth.
By the numbers
- Total revenue: $2.05 billion, up 3.8%
- GAAP diluted EPS: $5.92, versus $1.41
- EPS excluding special items: $1.56, down 1.3%
- KFC system sales: up 6% excluding currency
- Taco Bell same-store sales: down 4%
- Year-to-date cash returned: $1.82 billion
Sources
- Yum! Brands Form 8-K with third-quarter 2026 earnings release, filed Nov. 3, 2026 (accession 0001041061-26-000195)
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