Broad-based growth across core brands and International Markets for Yum! Brands in Q2 2025

Overview

Yum! Brands reported solid second-quarter 2025 results, achieving strong system sales growth across KFC, Taco Bell, and Pizza Hut, driven by international expansion, digital sales momentum, and menu innovation. The company continued to benefit from its global scale, operational efficiencies, and asset-light franchised model, delivering robust profitability despite macroeconomic headwinds in certain markets.

David Gibbs, CEO, commented: “Our second-quarter results are a testament to the power of our bold food innovation, digital transformation, and the strength of our iconic brands. Taco Bell U.S. meaningfully outpaced the category with 4% same-store sales growth, and KFC International opened 565 gross new units. I am confident that with our strong development across the system, improving value propositions, and exciting new uses of our proprietary, integrated tech stack, Yum! is well positioned to win in an ever-changing consumer landscape. As I reflect on my incredible 36-year journey with Yum!, it’s been a joy to bring our iconic brands to consumers around the world in collaboration with our world-class franchise partners and team members. Yum! is in an enviable position with the very best talent and leaders in this industry at the helm of our global brands. I couldn’t be more confident passing the torch to Chris Turner, whose deep understanding of our business and bold vision will continue to propel Yum! forward.”

Q2 2025 vs. Q2 2024:

Worldwide system sales grew 4% YoY excluding foreign currency translation, driven by 6% growth at Taco Bell and 5% growth at KFC, partially offset by a 1% decline at Pizza Hut.
- KFC Division system sales rose 6% YoY (+5% ex-FX), driven by 5% unit growth and 2% same-store sales growth. Opened 566 gross new restaurants across 58 countries. Operating profit increased 9% YoY (+8% ex-FX), supported by higher franchise revenues and slight margin improvement at company-owned stores (12.1%).
- Taco Bell Division system sales grew 6% YoY (+6% ex-FX), with 2% unit growth and 4% same-store sales growth. Added 50 gross new restaurants across 10 countries. Operating profit was up 5% YoY (+5% ex-FX), despite a 110 bps decline in company-owned restaurant margins to 24.5%.
- Pizza Hut Division system sales declined 1% YoY (flat ex-FX), as even unit growth could not offset a 1% drop in same-store sales. Opened 254 gross new restaurants across 32 countries. Operating profit fell 15% YoY (-15% ex-FX), impacted by timing of marketing investments, higher costs from franchise transitions, and bi-annual Global Franchise Convention expenses.
Unit count increased 3% YoY, with the addition of 871 gross new units in the quarter.
Digital sales surpassed $9bn, with a record 57% digital mix, underscoring strong consumer adoption of digital channels.
Foreign currency translation provided a $4m benefit to divisional operating profit.
GAAP EPS increased to $1.33 from $1.28 in Q2 2024 (+4% YoY). EPS excluding special items rose to $1.44 from $1.35 (+7% YoY), reflecting solid operating performance in KFC and Taco Bell, partially offset by Pizza Hut’s decline.

For full-year 2025, Yum! Brands continues to expect system sales growth in the mid-to-high single digits, led by international expansion, digital engagement, and menu innovation. Management maintains a disciplined approach to cost control and capital allocation, targeting sustained margin strength and double-digit EPS growth. The company remains focused on scaling its global footprint, accelerating digital adoption, and delivering long-term value for shareholders through its resilient, franchise-led business model.

Following its Q2 earnings release, Yum! Brands dropped sharply by -5.1% in a single session, before showing a modest recovery toward the end of the week. Despite the bounce, the stock remains close to key technical resistance levels, with the 50-day SMA at $145.46 and the 200-day SMA at $142.85, the latter almost aligning with the current price, potentially acting as both a pivot point and short-term hurdle. The RSI sits in neutral territory at around 42, indicating neither oversold nor overbought conditions. Year-to-date, YUM shares are still slightly positive with a +5.8% gain, but the proximity to both major moving averages could determine the next directional move in the medium term.