Executive Summary

Q4 revenue rose to $2.36B with GAAP operating profit up 8%; EPS was $1.49 and EPS excluding Special Items was $1.61, reflecting strong Taco Bell U.S. and recovering KFC International performance, boosted by a 53rd week .
Worldwide system sales grew 8% ex-FX; core operating profit rose 17% (12% excluding the 53rd week), while digital system sales exceeded $9B and digital mix topped 50% .
Management launched Byte by Yum!, an integrated AI-driven SaaS platform to accelerate digital adoption across brands, and raised the quarterly dividend 6% to $0.71, signaling confidence in cash returns .
2025 outlook: at least 4% unit growth (5% ex-Turkey closures), G&A up low-single-digit ex incentive reset (mid-single-digit including reset), interest expense $500–$520M, tax rate 22–24%, and on-algorithm ~8% core operating profit growth .
Catalysts: Tech platform rollout (Byte) across markets, Taco Bell U.S. outperformance (+5% SSS in Q4), and international recovery at KFC amid Middle East normalization; Turkey franchise termination creates a reset and re-franchise opportunity .

What Went Well and What Went Wrong

What Went Well

Taco Bell U.S. comps +5% and operating profit +19% in Q4; company-owned restaurant margins expanded 240 bps to 25.5%, supported by compelling value (e.g., $7 Luxe Box) and loyalty innovation .
KFC International showed sequential improvement with Q4 SSS flat YoY and a strong recovery in Middle East transactions to near pre-conflict levels by December; several markets delivered mid/high-single-digit comp growth .
Digital scaled materially: Q4 digital sales >$9B and mix >50%; launch of Byte by Yum! integrates ordering, kitchen, inventory, labor and AI personalization, improving speed-to-market and economics for franchisees .

What Went Wrong

Pizza Hut continued to face U.S. value competition with Q4 SSS at -1% and operating profit -4% YoY; operating margin fell 260 bps to 32.4% .
KFC operating margin compressed 430 bps to 39.0% YoY amid mix and market pressures; company restaurant margin decreased 170 bps to 12.3% .
Reported GAAP diluted EPS declined 8% YoY to $1.49; special items including Germany master franchise reacquisition and Turkey termination-related costs, and tax effects were notable headwinds .

Financial Results

Consolidated Results vs Prior Periods and Estimates

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenues ($USD Millions)	$2,036	$1,826	$2,362
GAAP Operating Profit ($USD Millions)	$609	$619	$657
Core Operating Profit ($USD Millions)	$629	$633	$739
Core Operating Profit Excl. 53rd Week ($USD Millions)	N/A	N/A	$703
Diluted EPS ($USD)	$1.62	$1.35	$1.49
EPS Excluding Special Items ($USD)	$1.26	$1.37	$1.61
Company Restaurant Margin %	17.4%	15.8%	17.9%
Primary EPS Consensus Mean ($USD)	N/A*	N/A*	N/A*
Revenue Consensus Mean ($USD Millions)	N/A*	N/A*	N/A*

Note: Consensus estimates were unavailable due to SPGI request limits. Values would be retrieved from S&P Global if accessible.*

Segment Breakdown (Q4 Year-over-Year)

Metric	KFC Q4 2023	KFC Q4 2024	Taco Bell Q4 2023	Taco Bell Q4 2024	Pizza Hut Q4 2023	Pizza Hut Q4 2024
Total Revenues ($USD Millions)	$761	$965	$819	$930	$281	$293
Operating Profit ($USD Millions)	$329	$377	$286	$340	$99	$95
Operating Margin (%)	43.3%	39.0%	34.9%	36.5%	35.0%	32.4%
System Sales ($USD Millions)	$8,888	$9,429	$4,887	$5,571	$3,535	$3,617
Same-Store Sales Growth (%)	+2%	Even	+3%	+5%	-2%	-1%

KPIs and Operational Metrics (Sequential Trajectory)

KPI	Q2 2024	Q3 2024	Q4 2024
Worldwide System Sales Growth ex-FX (%)	+3%	+1%	+8%
Worldwide Same-Store Sales (%)	-1%	-2%	+1%
Gross New Units Opened	894	1,029	1,804
Digital System Sales ($USD Billions)	~$8	>$8	>$9
Digital Mix (%)	>50%	>50%	>50%
Core Operating Profit Growth (%)	+10% YoY	+3% YoY	+17% YoY

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Unit Growth	FY 2025	Long-term algorithm: ~5%	At least 4%; ~5% excluding Turkey closures	Lowered vs algorithm due to Turkey exits
Core Operating Profit Growth	FY 2025	At least 8% (long-term algorithm)	Plan to deliver ~8% in 2025	Maintained
G&A Expense Growth	FY 2025	2024 ex-special declined ~6% (context)	Low single-digit ex incentive reset; mid-single-digit including reset	Raised vs 2024 actual (context)
Interest Expense	FY 2025	N/A	$500–$520M	New specific range
Effective Tax Rate	FY 2025	21–23% (previously communicated)	22–24%	Raised range
Net Leverage Target	Medium term	Deleveraging	Maintain ~4.0x; issue incremental debt as business grows	Strategy shift to maintain leverage
Dividend per Share	Q1 2025	$0.67	$0.71 (+6%)	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
AI/Digital Platform	Voice AI expansion at Taco Bell; digital sales ~$8B; >50% mix	Digital mix >50%; continued platform deployment	Launch of Byte by Yum!; integrated ordering, kitchen, loyalty; AI personalization; >$9B digital, >50% mix	Accelerating
KFC International Recovery	Unit growth +8%; SSS -3%; mixed regional trends	SSS -4%; franchisee health strong; net new units robust	Q4 SSS flat; Middle East transactions recovered; several markets mid/high-single-digit comps	Improving
Taco Bell U.S. Momentum	SSS +5%; OP +10%; 25.6% company margin	SSS +4%; OP +11%	SSS +5%; OP +19%; margin +240 bps; value and loyalty drove share gains	Strong
Pizza Hut U.S. Value Pressure	Flat system sales; SSS -3%; OP +4% Q2	SSS -4%; OP -6% Q3	SSS -1%; OP -4%; focus on balancing everyday value and disruptive promotions	Stabilizing but pressured
Macro/Middle East Impact	FX headwinds; regional conflict affecting comps	Continued headwinds; but franchisee base healthy	Recovery evident; December transactions near pre-conflict levels	Easing
Capital Returns/Leverage	Net leverage ~4.0x; robust unit openings	Returning $1.2B to shareholders in 2024	Plan to maintain ~4x leverage; higher capital returns; dividend increased	More returns

Management Commentary

CEO perspective: “2024 was marked with exceptional core operating profit growth… Taco Bell U.S. delivering same-store sales growth of 5% in the fourth quarter… KFC International delivering its second consecutive year with over 2,000 net new units” .
CFO on digital and Byte: “Digital sales up ~15% and digital mix surpassing 50%… Today, we are excited to announce Byte by Yum!, our proprietary SaaS digital ecosystem” .
CFO on 2025 plan: “We expect G&A to increase by a low single-digit percentage… We plan another very strong year of core operating profit growth, delivering on… 8%” .
CEO on brands: “Twin growth engines, Taco Bell U.S. and KFC International, delivered 7% system sales growth and 14% core operating profit growth in the fourth quarter” .

Q&A Highlights

International recovery and franchisee health: Middle East impacted markets rebounded (+11% system sales in Q4 for those markets); franchisee health evidenced by strong gross unit openings (4,500 in 2024) .
2025 algorithm composition: Turkey closures small EPS/royalty headwind; growth driven by KFC International recovery and Taco Bell U.S. strength to achieve ~8% core OP .
G&A trajectory: Long-term leverage on G&A as a percent of system sales while investing in AI and supply chain capabilities; 2025 G&A low single-digit ex reset .
KFC U.S. strategy: Modernize consumer experience, lean into digital and concept/menu innovation; expand KFC “Saucy” test concept to assess long-term role .
Byte strategy benefits: Integrated tech stack reduces third-party friction, speeds capability deployment (e.g., AI personalization); accelerates top- and bottom-line growth for franchisees .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to SPGI request limits at the time of retrieval; therefore, we cannot formally benchmark reported results versus consensus in this recap [GetEstimates error].
Given Taco Bell U.S. outperformance and KFC International recovery, we expect estimates to recalibrate positively for Taco Bell and to reflect improving international trends at KFC; Pizza Hut U.S. may see more conservative assumptions pending value strategy execution .

Key Takeaways for Investors

Taco Bell U.S. remains the profit engine: sustained SSS growth (+5%), margin expansion (+240 bps), and share gains should drive 2025 EPS quality and cash returns .
KFC International inflecting: Middle East normalization and selective market momentum point to improving comps and leverage on a large unit base; watch SSS and margin trend in 1H25 .
Pizza Hut execution pivotal: balancing everyday value with disruptive promotions and app experience upgrades is essential to reengage lapsed customers and stabilize margins .
Digital/AI moat expanding: Byte by Yum! integration should accelerate capability rollout and drive higher checks, frequency, and operational efficiency; follow deployment milestones and franchise adoption rates .
Capital returns rising: Dividend raised to $0.71 and plan to maintain ~4x leverage implies greater debt-funded buybacks as earnings grow; supportive for TSR .
2025 guide on-algorithm: At least 4% unit growth (5% ex-Turkey), 22–24% tax, $500–$520M interest, and ~8% core OP growth; monitor Q1 unit count reset from Turkey exits and planned Pizza Hut closures .
Special items and tax complexity remain: Germany master franchise reacquisition/Turkey termination and IP tax items affected GAAP metrics; focus on core OP and EPS ex-specials for underlying trajectory .

All claims and figures above are sourced from the Q4 2024 8-K press release and exhibits, the Q4 2024 earnings call transcripts, and related press releases as cited.

YUM BRANDS INC (YUM)·Q4 2024 Earnings Summary