Yum! Brands Inc Q1 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Brian Bittner - Oppenheimer & Co., Inc. - Analyst : My question is on KFC International. It's obviously a very important driver of the Yum! model and it was very encouraging to see the same-store sales for KFC International accelerate in the first quarter to that 3% level. We're sensing some worry by investors out there that perhaps American brands like KFC could be seeing softness outside the US from geopolitical dynamics, although it's really hard to find evidence of that happening. So I would love for you to address your take on this. And how you're thinking about the sustainability of KFC's improved trends moving forward?

Question: David Tarantino - Robert W. Baird & Co., Inc. - Analyst : Chris, I wanted to ask about the full year guidance, and I appreciate your comments on your confidence in achieving the 8% operating income growth. But I wanted to ask related to the back weighted nature of that, your degree of confidence in the second half acceleration in the profit growth and what gives you that confidence in light of maybe an uncertain macro backdrop?

Question: Dennis Geiger - UBS Equities - Analyst : I wanted to ask you another on the broader international or sort of impacts on the global macro environment, but specifically on store development across the portfolio. Could you talk a little bit more about that new development outlook for the year in thinking sort of what sounds like a strong trajectory excluding the planned closures? Sounds like ran these are in a good spot. Returns are encouraging, but any additional commentary on sort of the confidence in the development outlook, even if the macro were to have a downturn in your confidence there to kind of continue to hit numbers.

Question: David Palmer - Evercore ISI - Analyst : David, congratulations on what will be -- I was just checking this out on your bio that you're going to have a 37 year career at Yum! and yet somehow, you still seem pretty young. So good job. Well done on that. That's pretty incredible. At Taco Bell, I wanted to ask you, Chris, on Byte. It feels like early days in a good way for Byte, not just at Taco Bell, but for Yum! as an enterprise and for your franchisees and other systems. And what I wonder is, right now, maybe this is a period of investment in that you're going to be training models like your voice AI, for example, in the drive-through. It's going to be getting better. So maybe the benefits today are going to be a fraction of what they'll be as that those models get stronger and more robust and the fidelity is greater and you get to over 90% fulfillment and those things could happen more rapidly than we think. Maybe it's one or two years and you have something that even becomes an external revenue source for Yum! as you're sharing these tools and becomes a sort of an AWS for you guys. So maybe a comment on that. And then separately, on Saucy. We visited that concept, down when we were at the ICR. And it's a great concept. I wonder what you're going to do with that. That was a converted KFC, but that kind of looks expensive. Do you -- it's doing big volume. So maybe it becomes a growth concept in of itself. But maybe you can find some ways to sprinkle a little Saucy onto your existing KFCs in a more of an approachable price point.

Question: Danilo Gargiulo - Bernstein - Analyst : I want to ask a question beyond the dual engine of growth. So it's very clear, the dual engine of growth is working exceptionally well. But for an acceleration further, you might need to lean more into the remaining 20% of the operating profit. So KFC US and Pizza Hut. And this might be offering outside returns given that there is a relatively compressed expectations from the investor base. So can you spend more on the 3D strategy? And by when do you expect to see the sales and traffic to be more sustainably positive?

Question: John Ivankoe - JPMorgan - Analyst : The question is on the NVIDIA partnership. Really what Yum! expects to accomplish, I guess, both in the short term and the medium term and if you can help educate us of what is exclusive or proprietary or unique between NVIDIA and Yum! that you will be able to take advantage of that presumably many others in your industry that you compete against will not be able to?

Question: Andrew Charles - TD Cowen - Analyst : And just to echo, David, congrats on a story career at Yum! Very encouraging Taco Bell performance in the first quarter in a very tough US domestic backdrop. I'm curious is it realistic to expect that Taco Bell is up 10% performance on a two year basis can persist throughout 2025?