YUM BRANDS (YUM)·Q4 2025 Earnings Summary
Yum! Brands Delivers Double-Digit Profit Growth as Taco Bell Surges 7% Same-Store Sales
February 4, 2026 · by Fintool AI Agent
Yum! Brands delivered another quarter of solid execution with core operating profit growing 11% (excluding the 53rd week lap), led by Taco Bell's standout 7% same-store sales growth and KFC's record development year. GAAP EPS of $1.91 and adjusted EPS of $1.73 both exceeded expectations, while the company announced a 6% dividend increase and commenced a strategic options review for Pizza Hut.
The headline numbers: Taco Bell delivered 7% same-store sales growth for both Q4 and full year 2025, gaining market share. KFC opened a record ~3,000 new restaurants globally in 2025, with system sales up 6% excluding FX and the 53rd week. Pizza Hut remains the challenge, with same-store sales declining 1% and the company now exploring strategic alternatives.
CEO Chris Turner emphasized: "Yum! delivered another year of outstanding results at KFC and Taco Bell with our fundamentals stronger than ever at both brands."
Did Yum! Brands Beat Earnings?
Yes — adjusted EPS beat by 6.7%. Yum beat on the bottom line while revenue came in roughly in-line with expectations.
*Values retrieved from S&P Global
The quarter benefited from strong execution at Taco Bell and continued KFC development momentum. Foreign currency translation favorably impacted divisional operating profit by $11 million.
Ask Fintool AI AgentBrand Performance: Taco Bell Shines, Pizza Hut Struggles
Taco Bell: The Clear Winner
Taco Bell delivered exceptional performance with 7% same-store sales growth in both Q4 and full year 2025.
Taco Bell U.S. system sales grew 2% (6% for the year) while International grew 11% excluding FX. The brand opened 376 gross new restaurants across 27 countries for the full year.
Strategic Move: Yum! acquired 128 Taco Bell U.S. restaurants from a franchisee for approximately $670 million during the quarter.
KFC: Record Development Year
KFC achieved its best development year ever with nearly 3,000 new restaurants opened globally in 2025.
Regional Performance (Q4 ex-53rd week):
KFC opened 1,132 gross new restaurants during Q4 across 105 countries.
Pizza Hut: Strategic Review Underway
Pizza Hut continues to be the weakest performer, prompting a strategic options review.
U.S. particularly weak: Pizza Hut U.S. system sales declined 6% (ex-53rd week) with same-store sales down 3%. International was flat to slightly positive.
CFO Ranjith Roy noted: "We commenced a review of strategic options for the Pizza Hut brand." The company incurred ~$33M in Q4 advisory costs related to this review.
Ask Fintool AI AgentDigital Sales Continue Strong Momentum
Digital system sales exceeded $11 billion in Q4 with digital mix approaching 60%.
For the full year, digital system sales approached $40 billion with similar ~60% digital mix.
Full Year 2025 Performance
Yum! delivered solid full-year results despite the Pizza Hut headwinds:
System Sales Growth (ex-FX, ex-53rd week):
- Worldwide: +5%
- KFC: +6%
- Taco Bell: +8%
- Pizza Hut: -2%
Gross unit development was 4,567 for the year.
Special Items and One-Time Charges
Q4 2025 included several special items totaling $49M expense impact on operating profit:
Tax benefit: The quarter benefited from a $98M special tax benefit, primarily from intra-entity transfers of Pizza Hut intellectual property related to the strategic options review.
Capital Allocation and Dividend Increase
The Board approved a 6% dividend increase to $0.75 per share (from $0.71).
- Payable: March 6, 2026
- Record Date: February 20, 2026
Full Year 2025 Cash Flow:
Long-Term Growth Algorithm
Management reaffirmed its long-term financial targets:
CEO Chris Turner emphasized the "Raise the Bar" priorities entering 2026 and stated: "I'm more convinced than ever that the combination of our global scale, unrivaled culture and talent, and world-class franchise partnerships create a unique and unbeatable competitive advantage."
Balance Sheet Snapshot
The increase in total assets reflects the Taco Bell franchise acquisition and related intangible assets. Goodwill increased to $969M from $736M, and intangible assets rose to $909M from $416M.
What Did Management Guide for 2026?
Management provided specific 2026 guidance, with a notable separation between Pizza Hut and the rest of the portfolio.
Excluding Pizza Hut:
Corporate:
Pizza Hut Specific:
CFO Ranjith Roy stated: "Excluding the Pizza Hut division, we are confident the rest of our portfolio will meet or exceed every component of our long-term growth algorithm."
Pizza Hut: Hut Forward Program Details
The strategic review announced in November is progressing, with the Hut Forward program representing a bridge to longer-term brand acceleration.
Program Components:
- Vibrant marketing program alignment
- Modernization of certain technology and franchise agreements
- One-time Yum contribution to marketing support
- Approval of targeted closures of underperforming units
Expected Impact (Q1 2026):
- ~250 targeted US closures (small portion of 20,000 global estate)
- One-time marketing investments recorded in franchise and property expenses
- G&A growth from integration costs (UK store acquisitions)
The strategic review is expected to complete this year.
Taco Bell's 2030 Vision
CEO Chris Turner outlined Taco Bell's bold 2030 targets, framing the brand's growth runway:
2026 Growth Drivers:
- 26 new and tested innovation launches
- New Luxe Value Menu ("biggest value launch in brand's history")
- Loyalty program growth (+23% members in 2025)
- Digital expected to drive ~25% of AUV growth
Q4 Performance Breakdown (from Q&A):
- Transaction growth ~5 points ahead of category
- Penetration growth highest in 18-24 age range
- Growth across all income bands, with higher-income gains
- Growth with younger consumers and families
CEO Chris Turner: "Some other brands can do one or two of those things, but Taco Bell does all four of those things incredibly well—that's why they're winning."
Ask Fintool AI AgentByte by Yum: Technology Platform Update
Yum's proprietary restaurant technology platform, Byte by Yum, made significant progress in 2025 and is entering "Chapter Two" focused on product excellence and global adoption.
Platform Deployment:
2025 Performance:
- Digital ordering expanded to 5 new markets
- 370M+ digital transactions processed (+60% YoY)
Demonstrated Benefits:
2026 Expansion Plans:
- Smart Ops deploying to KFC UK
- Digital Ordering deploying to KFC Australia
- Advancing intelligent drive-thru and next-gen kiosk at Taco Bell
KFC: Market Development Deep Dive
Management highlighted specific market acceleration examples demonstrating how focused investment unlocks white space:
Franchise Consolidation:
- India: Devyani and Sapphire announced intent to merge (effective Jan 1), creating one of the largest F&B companies in India
- Asia: Carlyle Group acquired KFC Japan (2024) and now KFC Korea, signaling "long-term white space opportunity"
Penetration Opportunity (KFCs per million consuming class population):
CEO Turner noted Brazil is "recently under new management" and represents significant upside.
Q&A Highlights
On accelerating long-term growth (Dennis Geiger, UBS):
CFO Roy: "KFC delivered a tremendous 2025... record gross unit openings. That tells you that paybacks are strong, our franchisees are strong in KFC International."
On Yum China's development strategy (David Tarantino, Baird):
CFO Roy: "They're going after consumers with models that have strong paybacks, delivering positive transactions and same-store sales growth, but with mathematically lower AUVs. We're fully supportive of that strategy."
On unit growth trajectory:
CFO Roy confirmed that excluding Pizza Hut and Turkey closures, underlying unit development was "comfortably above 5%—around 6%."
On portfolio strategy post-Pizza Hut review (Jeffrey Bernstein, Barclays):
CEO Turner: "Right now, our primary focus is driving performance in all four of our brands... As we conclude that process, we'll share more on the long-term evolution of Yum's strategy."
How Did the Stock React?
YUM shares rose on the results:
The stock is up ~7% over the past month heading into earnings, suggesting some of the beat may have been anticipated.
Forward Estimates
*Values retrieved from S&P Global
Key Risks and Watch Items
- Pizza Hut strategic uncertainty: The outcome of the strategic review could range from a sale to a spin-off to continued ownership with restructuring
- U.S. consumer environment: Pizza Hut U.S. down 6% and KFC U.S. down 2% shows domestic weakness
- Turkey exposure: The termination of Turkish franchise agreements resulted in 537 restaurant closures in Q1 2025
- Leverage: Net debt remains elevated with shareholders' deficit of $7.3B
- 53rd week comp: The prior year 53rd week creates a headwind for FY2025 comparisons
- International FX exposure: Significant international business creates currency translation volatility
The Bottom Line
Yum! Brands delivered a solid Q4 with Taco Bell and KFC continuing to execute well while Pizza Hut remains the clear problem child. The 7% Taco Bell same-store sales growth and KFC's record development year demonstrate the strength of two of the three core brands, while the Pizza Hut strategic review signals management's willingness to address underperformance.
The 6% dividend increase and continued share repurchases show confidence in cash generation despite elevated leverage. The $670M Taco Bell franchise acquisition suggests management is betting on the brand's continued momentum.
For investors, the key question is what happens with Pizza Hut. A sale or spin-off could unlock value and simplify the story, while the remaining KFC/Taco Bell combination would be a cleaner growth story. In the meantime, Taco Bell continues to take market share and KFC continues its global development march.
Ask Fintool AI AgentData sources: Yum! Brands Q4 2025 8-K Filing , Q4 2025 Earnings Call Transcript , S&P Global consensus estimates. Analysis as of February 4, 2026.