Q3 Earnings Highlights: Yum! Brands (NYSE:YUM) Vs The Rest Of The Traditional Fast Food Stocks

As the leaves turn and the air grows crisp, so too do the earnings reports for the third quarter. Among the fast food giants, Yum! Brands (NYSE:YUM) has been making waves with its Q3 results. But how does it stack up against the competition? Let's dive in and find out.



Yum! Brands' Q3 Results: A Mixed Bag
Yum! Brands reported a mixed bag of results for the third quarter. Total revenues grew 7% year-over-year to $1.82 billion, but net income decreased 8% to $382 million, or $1.35 per share. Adjusted EPS fell 5% to $1.37. Revenue and earnings missed analyst expectations, and the stock was down over 1% in premarket hours on Tuesday. Worldwide system sales grew 1% while same-store sales fell 2% in Q3.



The Rest of the Traditional Fast Food Stocks: A Tale of Two Cities
While Yum! Brands' results were mixed, other traditional fast food stocks have been faring better. Wendy's (NASDAQ:WEN) reported adjusted EPS of 27 cents, outpacing the Zacks Consensus Estimate by a penny. Revenues of $550.6 million missed the consensus mark of $555 million but grew 3.4% on a year-over-year basis. McDonald's (NYSE:MCD) reported third-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. Global comps of McDonald's expanded 8.8% compared with 11.7% in the prior-year quarter. Yum China Holdings, Inc. (NYSE:YUMC) reported third-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate.



The Key Takeaways: What Sets Yum! Brands Apart?
Despite the mixed results, Yum! Brands has several key strengths that set it apart from its competitors. First and foremost, the company's twin growth engines, Taco Bell U.S. and KFC International, have been driving growth. Taco Bell U.S. significantly outperformed QSR competition with 4% same-store sales growth, while KFC International grew units an impressive 9% year-over-year. Additionally, Yum! Brands' focus on digital engagement, with robust digital system sales exceeding $8 billion and a digital mix over 50%, has been a key driver of growth.



In conclusion, while Yum! Brands' Q3 results were mixed, the company's twin growth engines and focus on digital engagement set it apart from its competitors. As the fast food landscape continues to evolve, Yum! Brands' unique strategy and focus on growth, value, international expansion, and digital engagement will be crucial for continued success. Investors should keep a close eye on Yum! Brands and its competitors as the earnings season unfolds and the market dynamics shift.