Yum! Brands reported that while its KFC subsidiary saw some struggles in the United States and other geographical regions during the third quarter of fiscal year 2024, growth and profitability are occurring in other regions.
“In many parts of the world, our brands are delivering outstanding growth and outperforming the competition,” Yum! Brands CEO David Gibbs said during a November 6 earnings call. “We continue to see strong sales growth in KFC in regions such as Africa, Latin America and the Caribbean, and parts of both Europe and Asia. In South Africa, where our KFC sales are up strongly, our teams have improved our value proposition, limiting recent price increases to 1% in comparison to nearly high single digits in affected local competitors.”
In the United States, Yum! Brands reported a 5% decline in same store sales during the most recent quarter. It marked the third consecutive quarter of declines for the KFC brand in the United States.
Gibbs said the performance didn’t meet expectations in other markets as well, many of those based on geopolitical challenges.
“The complex consumer environment that exists in many markets around the globe has contributed to pronounced regional sales variations, which has caused our system sales growth to fall short of our long-term algorithm this year. The most pronounced regional headwinds continue to be in the Middle East, Indonesia and Malaysia, stemming from the impact of the Middle East conflict in these markets,” said Gibbs.
He also said there were pressures that led to underperformance at certain stores in the United Kingdom, Australia and New Zealand, but Gibbs described those as “location-specific,” and not indicative of the overall performance in those markets.
Yum! Chief Financial Officer Chris Turner reported that companywide – which includes not only KFC but also Pizza Hut, Taco Bell, and Habit Burger and Grill – saw 1,029 restaurant openings and 482 closures. KFC led Yum! Brands’ gross openings at 685 new units in 65 countries.
“Notably, we’ve seen an acceleration this past year in net new unit expansion in markets like Italy, the Philippines and South Africa,” Turner said.
Also, by year’s end, 30 new KFC units are expected to be in operation in Saudi Arabia.
