YUM Brands 2025 Q2 Earnings Misses Targets as Net Income Grows 1.9%

YUM! Brands reported fiscal 2025 Q2 earnings on August 7, 2025. The results missed EPS estimates and showed a modest net income increase, with the company maintaining its long-term guidance for full-year EPS and revenue growth.

YUM! Brands reported its fiscal 2025 Q2 earnings on August 7, 2025, with results that missed Wall Street's expectations. The company's EPS of $1.34 fell short of the anticipated $1.46, and while it maintained its guidance for full-year EPS and revenue growth, it did not revise or raise its outlook following the quarter.

Revenue
Total revenue for YUM! Brands grew by 9.6% year-over-year to $1.93 billion in the second quarter of 2025. KFC remained the top-performing division with $849 million in revenue, followed by Taco Bell with $711 million. Pizza Hut and Habit Burger & Grill reported $239 million and $134 million in revenue, respectively. Corporate and unallocated revenue remained at $0, consistent with the prior year, and consolidated revenue totaled $1.93 billion.

Earnings/Net Income
Earnings per share increased by 3.1% to $1.34 in 2025 Q2 compared to $1.30 in the same period the previous year. Net income also rose by 1.9%, reaching $374 million from $367 million, indicating continued profitability for the company. Despite the modest EPS growth, the company's consistent profitability for over two decades highlights its operational resilience.

Price Action
Over the latest trading day, the stock price of YUM! Brands edged up 0.36%. However, it declined by 1.10% for the week and by 5.29% month-to-date, reflecting mixed investor sentiment.

Post-Earnings Price Action Review
A strategy of buying YUM! Brands shares following an earnings beat and selling after 30 days generated a 24.96% return. While this outperformed the 0% maximum drawdown—suggesting no downside risk—the return fell well below the benchmark of 89.22%, indicating a moderate Sharpe ratio of 0.64. This highlights the strategy's limited upside potential despite its favorable risk profile.

CEO Commentary
Greg Brenneman, CEO of YUM! Brands, acknowledged the Q2 2025 earnings shortfall. He emphasized the continued strength of KFC and Pizza Hut in international markets but noted ongoing challenges from elevated food and labor costs. Brenneman highlighted a strategic focus on digital transformation, localized innovations, and franchisee support to drive long-term growth and resilience.

Guidance
YUM! Brands provided updated guidance for the remainder of 2025, expecting full-year EPS to range between $1.40 and $1.50, with year-over-year revenue growth projected between 5.2% and 5.8%. The company plans to invest approximately $400 million in capital expenditures, focusing on store remodels and digital infrastructure. Management anticipates margin improvements through supply chain optimization and unit-level efficiency gains.

Additional News
YUM! Brands’ shares fell nearly 3% following the earnings report after it missed EPS estimates, with analysts anticipating $1.46 but receiving $1.44. Revenue totaled $1.93 billion, slightly below the $1.94 billion consensus forecast. The mixed performance highlighted the company’s global and brand diversification. Taco Bell led with 6% system sales growth, while KFC’s international operations also showed strength. US sales for KFC and Pizza Hut, however, declined. The company’s digital sales mix reached 57%, and it expanded its global unit count to 60,893. Leadership transition is also underway, with CFO Chris Turner set to become CEO in October 2025, succeeding David Gibbs. The leadership change comes as the company faces uneven performance in key markets but remains focused on long-term global expansion and digital adoption.