This report does not constitute a rating action. S&P Global Ratings believes Tacala is mostly past the Cyclospora outbreak. The recent downturn in guest traffic is transitory, and we expect a normalization in the fourth quarter as consumers return to pre-Cyclospora consumption patterns. We anticipate fading food safety concerns and Taco Bell’s value proposition (e.g., ‘Luxe’ boxes) will support this recovery, which we forecast will result in modest same restaurant sales (SRS) growth for the quarter, compared to a 4.6% SRS decline in the third quarter. We forecast 4%-5% SRS growth in 2027. While the quick service restaurant (QSR) sector overall is experiencing declining visitation, we expect Tacala and the wider Taco Bell franchise to remain resilient due to its
