Yum! Brands Inc Q3 2024 Earnings Call Summary

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

Question: Gregory Francfort - Guggenheim Securities LLC - Analyst : Hey, thanks for the question. My question is going to be on operating profit growth, but thanks for the thoughts in the fourth quarter. I think that leaves you a little bit below the 8% growth for this year. I guess, as you look out to next year, how confident are you in getting that back up to 8%? And what's the bridge maybe from what the outlook looks like this year to what might be the contributors next year? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 12:45PM, YUM.N - Q3 2024 Yum! Brands Inc Earnings Call

Question: Brian Bittner - Oppenheimer & Co., Inc. - Analyst : Thank you. Good morning. Just a confirmation question then I'll follow up on Taco Bell. Just on the guidance for the fourth quarter as it relates to the mid- to high single-digit core operating profit growth, are you able to talk about the base case for global same-store sales that does underpin that outlook by any chance? And just on Taco Bell, very strong relative performance, obviously with your 4% same-store sales. And you mentioned that you are the best ranked by consumers in value within QSR. During the quarter, that obviously happens at a time where the industry got way more aggressive. So just curious how you protected or even expanded your value positioning in this environment? And is there any new value ideas in the hopper as we move into 2025, particularly as a few large QSRs are eager to put more permanent value on their on their menu? Thanks.

Question: Jon Tower - Citi - Analyst : Thanks. I appreciate all the color you provided in the gross unit openings for the brands across the globe. I was hoping maybe you could drill a little bit more into the net unit number -- David, I think you mentioned that there's potential risk of not hitting the 5% this year. And then maybe specifically drilling into -- you do have pockets of weakness across the globe. And I think you'd mentioned some of the smaller operators having a hard time keeping the lights on. How should that inform the thinking regarding 2025? Is there an opportunity to perhaps consolidate some of those closures into '24, such that '25 is a cleaner year? And or are there opportunities to consolidate some of those stores into larger operators within markets such that your net unit number is not under too much pressure?

Question: Dennis Geiger - UBS - Analyst : Great. Thank you. Good morning, guys. Recognizing it's too early to talk about '25 specifically, wondering if you could just comment high level about how you think about managing profitability as well as the team has in '24 if macro pressures continue? Maybe specifically, can you talk a little bit about your G&A growth and how you think about that generally looking ahead and perhaps, the ability of the divisions to continue managing costs and profitability? Thank you.

Question: David Palmer - Evercore ISI - Analyst : Thanks. I wanted to maybe double-click on a couple of the digital initiatives you highlighted: the AI-enabled digital marketing that you talked about, Chris. And David mentioned the AI-enabled drive-throughs in the release. On the digital AI marketing, is that hyper-personalized push marketing in the app and other? You mentioned it was a nice lift where you're rolling that out. Could you maybe give some more color about what that lift was and where the rollout is across your brands? And on the AI voice drive-throughs in the US, I'm wondering if that could be a nice profit driver for Yum! Brands? Any reasons that would not scale quickly in 2025 and any offsets to the fees you'll collect there? Thanks very much.

Question: John Ivankoe - JP Morgan - Analyst : Hi, thank you very much. In your prepared remarks, you really did touch on many digital initiatives, many which have yet to get to the hands of franchisees fully, especially on a global basis. So the question is, on a previous Yum! language bending the curve on G&A. If there's not further opportunity in '25, Taco Bell and (inaudible), longer term, how much of an opportunity do we have to use fee collection from franchisees that will significantly drive their own profitability and ease of running their own businesses? To kind of think about in a fee recapture, if you will, on a basis points of franchisee sales basis, I mean, your sales base is so big, collecting even 50 basis points or 100 basis points of franchise sales would obviously be very significant in terms of your total G&A expense. I wanted to see if we could have an opportunity to date to kind of think about the longer-term potential of that?

Question: David Tarantino - Robert W. Baird & Co., Inc. - Analyst : Hi, good morning. My question, David, I think you mentioned that as part of your response to a question, the comp trend you saw in the third quarter carried over into Q4. I just wanted to make sure that that comment was directly related to Taco Bell and not the global business? And I guess secondly, I was wondering if you could comment on the KFC segment and the comparison does get quite a bit better or easier in the fourth quarter, but I know you still have some macro pressures you're dealing with. So any sort of directional commentary on the KFC business and how we should think about that for the fourth quarter would be great. Thanks.