Yum! Brands | 8-K: FY2026 Q2 Revenue Misses Estimate at USD 2.169 B

Revenue: As of FY2026 Q2, the actual value is USD 2.169 B, missing the estimate of USD 2.177 B.

EPS: As of FY2026 Q2, the actual value is USD 3.08, beating the estimate of USD 1.5618.

EBIT: As of FY2026 Q2, the actual value is USD 661 M.

Consolidated Financial Performance (Second Quarter 2026 vs. 2025)

Revenue

• Total revenues for Yum! Brands, Inc. increased by 12% to $2,169 million in Q2 2026 from $1,933 million in Q2 2025.
• Company sales grew by 25% to $837 million in Q2 2026 from $669 million in Q2 2025.
• Franchise and property revenues rose by 7% to $895 million in Q2 2026 from $835 million in Q2 2025.
• Franchise contributions for advertising and other services increased by 2% to $438 million in Q2 2026 from $428 million in Q2 2025.

Operating Profit

• GAAP Operating Profit grew by 5% to $655 million in Q2 2026 from $622 million in Q2 2025.
• Core Operating Profit grew by 5% to $683 million in Q2 2026 from $650 million in Q2 2025.
• Foreign currency translation favorably impacted divisional operating profit by $16 million.

Net Income

• Net Income increased by 128% to $853 million in Q2 2026 from $374 million in Q2 2025.

Operating Costs

• Total costs and expenses, net, increased by 16% to $1,514 million in Q2 2026 from $1,311 million in Q2 2025.
• Company restaurant expenses grew by 25% to $700 million in Q2 2026 from $560 million in Q2 2025.
• General and administrative expenses increased by 7% to $324 million in Q2 2026 from $302 million in Q2 2025.
• Franchise and property expenses increased by 6% to $41 million in Q2 2026 from $39 million in Q2 2025.
• Franchise advertising and other services expense rose by 4% to $444 million in Q2 2026 from $428 million in Q2 2025.
• Refranchising gain was - $1 million in Q2 2026 compared to a gain of - $11 million in Q2 2025.
• Other (income) expense was $6 million in Q2 2026 compared to - $7 million in Q2 2025.

Cash Flow (Year-to-Date 2026 vs. 2025)

• Net cash provided by operating activities was $923 million in YTD 2026, up from $850 million in YTD 2025.
• Net cash used in investing activities was - $169 million in YTD 2026, compared to - $130 million in YTD 2025.
• Net cash used in financing activities was - $757 million in YTD 2026, compared to - $741 million in YTD 2025.

Operational Metrics

• Worldwide system sales grew 5% excluding foreign currency translation.
• Unit count increased 5%, including 1,053 gross new units in the quarter.
• Excluding Pizza Hut, digital system sales approached $9 billion, with digital mix exceeding 60%.

Segment Performance (Second Quarter 2026 vs. 2025)

KFC Division

• Total revenues increased by 9% to $924 million in Q2 2026 from $849 million in Q2 2025.
• Operating Profit grew by 13% to $410 million in Q2 2026 from $363 million in Q2 2025.
• Operating Margin increased by 1.6 percentage points to 44.3% in Q2 2026 from 42.7% in Q2 2025.
• Company restaurant margin was 12.0%, down 0.1 percentage points year-over-year.
• KFC Division opened 660 gross new restaurants across 55 countries.
• System Sales Ex F/X grew by 6% and Same-Store Sales grew by 2%.

Taco Bell Division

• Total revenues increased by 20% to $853 million in Q2 2026 from $711 million in Q2 2025.
• Operating Profit grew by 19% to $311 million in Q2 2026 from $262 million in Q2 2025.
• Operating Margin decreased by 0.4 percentage points to 36.4% in Q2 2026 from 36.8% in Q2 2025.
• Company restaurant margin was 25.9%, up 1.6 percentage points year-over-year.
• Taco Bell Division opened 54 gross new restaurants across 15 countries.
• System Sales Ex F/X grew by 9% and Same-Store Sales grew by 7%.

Pizza Hut Division

• Total revenues increased by 6% to $254 million in Q2 2026 from $239 million in Q2 2025.
• Operating Profit decreased by 12% to $70 million in Q2 2026 from $80 million in Q2 2025.
• Operating Margin decreased by 5.9 percentage points to 27.6% in Q2 2026 from 33.5% in Q2 2025.
• Company restaurant margin was 2.2%, up 8.8 percentage points year-over-year.
• Pizza Hut Division opened 333 gross new restaurants across 33 countries.
• System Sales Ex F/X decreased by 2% and Same-Store Sales decreased by 1%.

Habit Burger & Grill Division

• Habit Burger & Grill Division opened 6 gross new restaurants.
• System sales grew 7% and same-store sales grew 3%.
• GAAP Operating Loss was - $4 million in Q2 2026 compared to a profit of $3 million in Q2 2025.

Outlook / Guidance

• Yum! Brands, Inc. targets long-term financial performance metrics including 5% unit growth, 7% system sales growth (excluding foreign currency translation), and at least 8% Core Operating Profit Growth.
• The company expects to accelerate growth as a more focused organization following the sale of the Pizza Hut business.
• KFC’s aspiration is to have core elements of its refreshed brand identity and menu revamp live across its Top 20 markets by the end of 2027.