Yum! Brands — Third Quarter 2026 Earnings Summary

Financial Performance:

• GAAP EPS for the quarter ended September 30, 2026, was $5.92, compared to $1.41 in the prior year period, representing a 319% increase; year-to-date GAAP EPS was $10.51, up 188% from $3.64.
• EPS excluding Special Items was $1.56 for the quarter (down 1% year-over-year) and $4.68 for the year-to-date period (up 8% year-over-year).
• GAAP Operating Profit for the quarter was $2,317 million, a 248% increase from $666 million in the prior year; year-to-date GAAP Operating Profit was $3,616 million, up 97% from $1,836 million.
• Core Operating Profit (excluding Special Items and foreign currency translation) grew 1% for the quarter and 6% for the year-to-date period.
• Total revenues were $2,054 million for the quarter (up 4% year-over-year) and $6,282 million for the year-to-date period (up 10% year-over-year).
• Net Income was $1,623 million for the quarter and $2,908 million for the year-to-date period.
• Net Cash Provided by Operating Activities was $1,398 million for the year-to-date period, compared to $1,393 million in the prior year.
• Net Cash Provided by Investing Activities was $2,155 million for the year-to-date period, driven by $2,380 million in proceeds from Pizza Hut divestitures.
• Net Cash Used in Financing Activities was $2,180 million for the year-to-date period, including $1,202 million in share repurchases and $616 million in dividends paid.
• Cash and cash equivalents increased to $2,108 million as of September 30, 2026, from $709 million as of December 31, 2025.
• Long-term debt decreased to $9,459 million as of September 30, 2026, from $11,872 million as of December 31, 2025.
• A pre-tax gain of approximately $1.7 billion related to the sales of Pizza Hut was recorded in the quarter.

Guidance and Future Outlook:

• The Company targets long-term financial performance metrics of 5% unit growth, 7% system sales growth (excluding foreign exchange), and at least 8% Core Operating Profit growth.
• Management stated confidence in delivering consistent earnings growth and creating long-term shareholder value, citing iconic brands, global scale, and development white space.
• Management noted that Taco Bell U.S. has been outpacing the QSR industry on same-store sales growth since the end of September.
• The Company is unable to forecast Special Items or the impact of foreign exchange rates on GAAP Operating Profit Growth.

Business Segments and Product Lines:

• KFC Division:
  • Global unit count increased 7% with 955 gross new units added in the quarter.
  • System sales grew 6% excluding foreign exchange; same-store sales grew 1%.
  • Operating profit increased 9% (reported) and 8% (Core) for the quarter; year-to-date operating profit increased 13% (reported) and 8% (Core).
  • Company-owned restaurant margins were 12.3%, down 140 basis points year-over-year, primarily due to 15 lower-margin stores tested under the Saucy brand.
  • Digital system sales exceeded $9 billion globally, with a digital mix of 64%.
• Taco Bell Division:
  • Unit count increased 3%.
  • System sales declined 2% excluding foreign exchange; same-store sales declined 4% for the quarter.
  • Operating profit decreased 5% (reported) and 4% (Core) for the quarter; year-to-date operating profit increased 10% (reported) and 10% (Core).
  • U.S. system sales declined 3% and same-store sales declined 4%; U.S. company-owned restaurant margins were 20.5%.
  • International system sales excluding foreign exchange grew 14% and same-store sales grew 5%.
• Habit Burger & Grill Division:
  • Opened 4 gross new restaurants.
  • System sales grew 3% and same-store sales were flat.
  • GAAP Operating Loss was $1 million for the quarter and $12 million for the year-to-date period.
• Pizza Hut Division:
  • Divestitures completed: Sale of Pizza Hut in mainland China to Yum China on August 7, 2026, and sale of Pizza Hut excluding mainland China to LongRange Capital on September 1, 2026.
  • Results for the quarter and year-to-date include Pizza Hut prior to sale dates.
  • Operating profit decreased 41% for the quarter and 23% for the year-to-date period.

Market and Competitive Landscape:

• KFC delivered record Q3 global gross unit development.
• Taco Bell U.S. has outpaced the QSR industry on same-store sales growth since the end of September.
• KFC is scaling a new global strategy reflecting its ambition to be the most modern chicken QSR.
• Taco Bell is building momentum with differentiated value and innovation across all consumer groups.

Risks and Challenges:

• Risks include food safety concerns, public health conditions, geopolitical instability, foreign currency risks, and labor shortages or increased labor costs.
• The Company faces risks related to the success of its development strategy, the financial stability of franchisees, and the ability to realize anticipated benefits from the Pizza Hut divestiture.
• Specific risks mentioned include the impact of the July 2026 cyclospora outbreak, exposure to the Chinese market, and potential impacts from restrictive trade policies or anti-American sentiment.
• Risks also include cybersecurity threats, data privacy compliance, and the impact of social media on brand reputation.

Management Commentary and Tone:

• Chris Turner, CEO, stated that Yum! has entered its "next chapter of growth" with a sharper focus on "Raise the B.A.R." priorities following the Pizza Hut divestiture.
• Management expressed pleasure that Taco Bell U.S. is outpacing the industry on same-store sales growth since the end of September.
• The tone is confident regarding the ability to deliver consistent earnings growth and create long-term shareholder value.

Other Key Points:

• Yum! returned $1.8 billion to shareholders through dividends and share repurchases year-to-date.
• Dividends declared per common share were $0.75 for the quarter and $2.25 for the year-to-date period.
• Share repurchases totaled $1,202 million for the year-to-date period.
• A $44 million net litigation settlement related to credit card interchange fees was recorded as a Special Item in Other income.
• Special Items included charges associated with the Pizza Hut strategic options review ($26 million quarter, $107 million year-to-date), Brand HQ consolidation ($1 million quarter, $20 million year-to-date), and resource optimization ($5 million quarter).
• The Company operates more than 44,000 KFC, Taco Bell, and/or Habit Burger & Grill restaurants across 150-plus countries and territories.