Yum Brands saw strong results during the first quarter ended March 31, with systemwide same-store sales growth up by 9%, driven by continued digital sales boost, the company reported on Wednesday.
Yum’s growth was led by Pizza Hut’s same-store sales of 12%, followed by Taco Bell at 9% and KFC at 8%. All four of the company’s brands, including Habit Burger, set weekly sales records at least once during the quarter.
“Our solid same-store sales uplift is a testament to our team rising above the challenges of the pandemic and unlocking digital and off-premise growth,” Yum Brands CEO David Gibbs said during Wednesday’s earnings call, adding that the company saw a 16% increase in restaurants offering delivery globally.
KFC’s performance was driven by the expansion of delivery and positive customer response to the new chicken sandwich, which was first tested by customers in spring 2020. The response has been so strong, Gibbs said, that they’ve had some supply chain-side issues with keeping up with demand. Yum also noted that KFC focused last quarter on drive-thru efficiency with U.S. drive-thru speed improving by an average of 15 seconds in the first quarter.
On the Pizza Hut side, despite a strong first quarter of 7% sales growth, the company saw a 4% unit decline with the transition of former NPC International Pizza Hut restaurants to Flynn Restaurant Group.
Meanwhile, Taco Bell’s first quarter profitability was driven by both marketing creativity and menu innovation with the return of nachos fries and cheesy fiesta potatoes in January and the brand’s first digital-only launch of the $5 build your own cravings box. Taco Bell also saw a boost in drive-thru efficiency with their fastest average drive-thru speeds in eight years.
At the end of last quarter, Yum Brands also notably invested in two technology companies — Kvantum and TicTuk — to utilize customer data and expand omnichannel ordering, respectively.
“We ask ourselves the question of should we build tech capability in-house or contract with an external provider and we run that test we should have it in house and if that has a strategic competitive advantage,” Gibbs said Wednesday.
Yum Brands’ revenue increased 18% to $1.49 billion year over year. The company reported first quarter net income of $326 million, or $1.07 per share, up from $83 million, or $0.27 per share the same quarter the year earlier.
Yum Brands added 435 net new units in last quarter, at a unit growth rate of 1%.
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