Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

9b64103dd5c88bf30ebf01863a1c9eb9b419fb3bbba235185ce52368095edf55

| Metric [Unit: $ Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **U.S. Company Sales**   | N/A     | **380**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A     | **408**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A     | **383**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **423**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **418**  **[0001041061-24-000039_yum-20240930.htm:10]**  |
| **U.S. Franchise Revenues** | N/A  | **295**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A     | **309**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A     | **300**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **324**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **323**  **[0001041061-24-000039_yum-20240930.htm:10]**  |
| **U.S. Property Revenues** | N/A   | **15**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A     | **15**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A     | **14**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **14**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **14**  **[0001041061-24-000039_yum-20240930.htm:10]**  |
| **U.S. Franchise Contributions** | N/A | **226**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A | **233**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A | **230**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **244**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **243**  **[0001041061-24-000039_yum-20240930.htm:10]**  |
| **China Franchise Revenues** | N/A | **84**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A     | **84**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A     | **85**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **79**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **87**  **[0001041061-24-000039_yum-20240930.htm:10]**  |
| **Other Company Sales** | N/A     | **94**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A     | **102**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A     | **91**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **149**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **203**  **[0001041061-24-000039_yum-20240930.htm:10]**  |
| **Other Franchise Revenues** | N/A | **363**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A     | **376**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A     | **347**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **360**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **369**  **[0001041061-24-000039_yum-20240930.htm:10]**  |
| **Other Property Revenues** | N/A  | **13**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A     | **12**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A     | **11**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **12**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **11**  **[0001041061-24-000039_yum-20240930.htm:10]**  |
| **Other Franchise Contributions** | N/A | **175**  **[0001041061-23-000025_yum-20230331.htm:9]**  | N/A | **169**  **[0001041061-23-000050_yum-20230930.htm:10]**  | N/A | **137**  **[0001041061-24-000020_yum-20240331.htm:8]**  | **158**  **[0001041061-24-000033_yum-20240630.htm:10]**  | **158**  **[0001041061-24-000039_yum-20240930.htm:10]**  |

99afda09c23570323d28ca600bc6736549c5e914e9248df95cb98a17d2692d71

| Business Segment | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **KFC Division** ($ million) | **793**  **[0001041061-23-000003_a8kex991282023.htm:15]**  | **687**  **[0001041061-23-000025_yum-20230331.htm:10]**  | **682**  **[0001041061-23-000037_a8kex991822023.htm:13]**  | **700**  **[0001041061-23-000046_a8kex9911112023.htm:13]**  | **761**  **[0001041061-24-000003_a8kex991272024.htm:14]**  | **632**  **[0001041061-24-000014_a8kex991512024.htm:13]**  | **717**  **[0001041061-24-000029_a8kex991862024.htm:13]**  | **785**  **[0001041061-24-000036_a8kex9911152024.htm:13]**  |
| **Taco Bell Division** ($ million) | **766**  **[0001041061-23-000003_a8kex991282023.htm:15]**  | **572**  **[0001041061-23-000025_yum-20230331.htm:10]**  | **621**  **[0001041061-23-000037_a8kex991822023.htm:13]**  | **629**  **[0001041061-23-000046_a8kex9911112023.htm:13]**  | **819**  **[0001041061-24-000003_a8kex991272024.htm:14]**  | **598**  **[0001041061-24-000014_a8kex991512024.htm:13]**  | **666**  **[0001041061-24-000029_a8kex991862024.htm:13]**  | **666**  **[0001041061-24-000036_a8kex9911152024.htm:13]**  |
| **Pizza Hut Division** ($ million) | **288**  **[0001041061-23-000003_a8kex991282023.htm:15]**  | **254**  **[0001041061-23-000025_yum-20230331.htm:10]**  | **242**  **[0001041061-23-000037_a8kex991822023.htm:13]**  | **242**  **[0001041061-23-000046_a8kex9911112023.htm:13]**  | **281**  **[0001041061-24-000003_a8kex991272024.htm:14]**  | **238**  **[0001041061-24-000014_a8kex991512024.htm:13]**  | **239**  **[0001041061-24-000029_a8kex991862024.htm:13]**  | **238**  **[0001041061-24-000036_a8kex9911152024.htm:13]**  |
| **Habit Burger Grill Division** ($ million) | **172**  **[0001041061-23-000003_a8kex991282023.htm:15]**  | **132**  **[0001041061-23-000025_yum-20230331.htm:10]**  | **142**  **[0001041061-23-000037_a8kex991822023.htm:13]**  | **137**  **[0001041061-23-000046_a8kex9911112023.htm:13]**  | **175**  **[0001041061-24-000003_a8kex991272024.htm:14]**  | **130**  **[0001041061-24-000014_a8kex991512024.htm:13]**  | **141**  **[0001041061-24-000029_a8kex991862024.htm:13]**  | **137**  **[0001041061-24-000036_a8kex9911152024.htm:13]**  |

cab518823c071790cbd9966cefd6a2fabfec5afb427173511db162d88db5be32

Yum! Brands, Inc. (YUM) operates a global system of over 58,000 restaurants in more than 155 countries and territories under four main concepts: KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill **[0001041061-24-000011_yum-20231231.htm:4]** **[0001041061-24-000011_yum-20231231.htm:84]**. The company specializes in offering a variety of fast-food options, including chicken products, Mexican-style food, pizza, and chargrilled burgers **[0001041061-24-000011_yum-20231231.htm:4]**. The majority of Yum! Brands' restaurants are operated by franchisees, with franchise and property revenues playing a significant role in the company's financial structure **[0001041061-24-000011_yum-20231231.htm:4]** **[0001041061-24-000011_yum-20231231.htm:84]** **[0001041061-24-000011_yum-20231231.htm:81]** **[0001041061-24-000011_yum-20231231.htm:87]**.

1. **KFC** - Specializes in chicken products, offering a wide range of fried and grilled chicken meals.
2. **Taco Bell** - Offers Mexican-style food, including tacos, burritos, and other specialty items.
3. **Pizza Hut** - Focuses on pizza, providing a variety of pizza styles and complementary side dishes.
4. **The Habit Burger Grill** - Known for chargrilled burgers, offering a fast-casual dining experience.

a930c3cebfef5c6e65bbe123626a208d11684eab96747e58e3106e55ce4d8247

Adjustments for Non-Cash Items

Stock-Based Compensation [USD, Millions]

Changes in Working Capital

Capital Expenditures (CapEx) [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

43a64ec1d56ea1bdb212656c3a405a51528c3ee20517815607ad9a9593f06856

1. Given that sales trended below expectations this quarter due to challenges in the U.S., soft trends in China, and pressures from the Middle East conflict, can you elaborate on the specific strategies you are implementing to mitigate these headwinds and drive sales growth in these key markets?  **[YUM_3405729_1]** 

2. You've mentioned the risk of not achieving your 5% unit growth target due to increased closures, particularly in markets affected by the Middle East conflict. How do you plan to address these closures, and what measures are you taking to ensure unit growth returns to your long-term targets?  **[YUM_3405729_1]** 

3. With elevated closures impacting net new unit growth, especially in the Middle East and China, how is this affecting your overall system sales growth, and do you expect these challenges to continue into next year?  **[YUM_3405729_1]** **[YUM_3405729_11]** 

4. The complex consumer environment has led to significant same-store sales declines in certain markets, with KFC same-store sales declines ranging between 15% and 45% throughout the year. How confident are you in offsetting these declines through growth in other regions, and what initiatives are you implementing to improve same-store sales performance globally?  **[YUM_3405729_1]** **[YUM_3405729_2]** 

5. Your net leverage ratio ended the quarter at **4.1x**, and you've stated that you have no debt maturities until 2026. Given the challenging operating environment and potential pressures on cash flow, how do you assess your balance sheet flexibility and capital allocation priorities moving forward?  **[YUM_3405729_8]** 

0863cadbc74bd145580f08e05923d1e4f9890f33a7507ee6a065a32b972e53f7

d1e1f4bb5b5e9013c378457f78f09fc13838f6b2bba3ba823dc0bf829b5d740e

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q4 2024
- **Guidance**:
  1. **Q4 Core Operating Profit Growth**: Expected to be in the **mid- to high single digits**, excluding contributions from the 53rd week, which is expected to add approximately **$35 million**  **[YUM_3405729_8]** .
  2. **Taco Bell Fourth Quarter Company-Operated Store Margins**: Expected to be in the range of **23% to 24%**  **[YUM_3405729_8]** .
  3. **Q4 Net Interest Expense**: Expected to be just under **$140 million**  **[YUM_3405729_8]** .
  4. **Unit Growth**: Risk to the 5% unit growth target due to increased closures, primarily in markets affected by the Middle East conflict and in China. The expected range is **4.5% to 5.0%**  **[YUM_3405729_11]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Unit Growth**: Expected to achieve **5% unit growth** for the full year 2024, despite challenges such as the Middle East conflict  **[YUM_3396571_8]** .
  2. **Taco Bell Store Margins**: Full-year Taco Bell company-operated store margins are expected to be in the range of **23% to 24%**  **[YUM_3396571_8]** .
  3. **General and Administrative (G&A) Expenses**: Excluding the 53rd week, ex-special G&A expense is expected to be lower on a year-over-year basis by a low single-digit percentage  **[YUM_3396571_8]** .
  4. **Core Operating Profit Growth**: Confident in delivering at least **8% core operating profit growth** for the full year 2024, excluding the benefit of the 53rd week  **[YUM_3396571_8]** .
  5. **Sales Outlook**: Updated to reflect continued softness tied to the Middle East conflict, but sequential improvement in sales is expected quarter-to-quarter  **[YUM_3396571_8]** **[YUM_3396571_12]** .
  6. **Foreign Currency Impact**: A $12 million negative impact in Q2, with a cumulative headwind of nearly $180 million since interest rates began to rise in Q1 2022  **[YUM_3396571_5]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core Operating Profit Growth**: Target to grow core operating profit by at least **8%** for the full year 2024, excluding the benefit of the 53rd week  **[YUM_3381838_11]** **[YUM_3381838_8]** .
  2. **Unit Growth**: Expect a strong unit development story with unit growth at or above **5%**, led by KFC International  **[YUM_3381838_8]** .
  3. **Taco Bell Margins**: Full-year Taco Bell company-operated margins are expected to be in the range of **23% to 24%**  **[YUM_3381838_8]** .
  4. **General and Administrative Expenses (G&A)**: Excluding the 53rd week, expect ex-special G&A to be flat to slightly down for the year, including incremental G&A associated with the KFC U.K. acquisition  **[YUM_3381838_8]** .
  5. **System Sales Growth**: First quarter system sales grew by **2%**, driven by **6%** unit growth  **[YUM_3381838_6]** .
  6. **Digital Sales**: Digital sales continued an upward trajectory, approaching **$8 billion**, up **11%** year-over-year, with digital sales representing over **50%** of system sales in Q1  **[YUM_3381838_1]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Top Line Trends**: Expect top line trends in Q1 to be the most challenged, with same-store sales trends improving sequentially as laps cease and a range of sales-driving initiatives take hold  **[YUM_3372179_8]** .
  2. **Taco Bell Company Operated Margins**: Expected to be in the range of **23% to 24%** for the full year  **[YUM_3372179_8]** .
  3. **General and Administrative (G&A) Expenses**: Anticipate flat ex-special G&A growth, managing spend across the organization  **[YUM_3372179_8]** .
  4. **Tax Rate**: Full year tax rate expected to be in the range of **21% to 23%**  **[YUM_3372179_8]** .
  5. **Core Operating Profit Growth**: Expected to be at least **8%**, excluding the benefit of the 53rd week  **[YUM_3372179_7]** .
  6. **Unit Development**: Strong unit development pipeline, with expectations for development in 2024 to continue at a robust pace  **[YUM_3372179_6]** .
  7. **Same-Store Sales**: Expect sequential improvement throughout the year, with a focus on their primary growth drivers, KFC International and Taco Bell U.S.  **[YUM_3372179_10]** .
  8. **G&A Expenses for 2024**: Expected to be flat on a 52-week basis compared to the previous year  **[YUM_3372179_12]** .
  9. **Digital and Technology Investments**: Plan to continue accelerating the rollout of digital capabilities, expected to drive productivity and support strong unit economics  **[YUM_3372179_11]** .
  10. **Share Repurchases and Investments**: Plan to use excess free cash flow to fund share repurchases and any accretive investments  **[YUM_3372179_7]** .

092fe15f4859b5aaf6f24b038df2d14d557eabd8f08313604634ede65496c138

1. **Operating Profit Growth Target**  
   **Q:** What's needed to hit 8% operating profit growth despite weak comps?  
   **A:** Management reaffirmed their 2024 target of at least **8%** core operating profit growth \[1\]. They plan to rely on new unit development as a strong lever to achieve this goal \[1\]. The development pipeline is robust, and they are confident in their global partners \[1\]. Same-store sales growth is hard to predict in the current environment, so they're counting more on development to reach their targets \[1\].

2. **KFC International Performance**  
   **Q:** How are KFC International sales and outlook amid global challenges?  
   **A:** KFC International remains a key growth driver, contributing **85%** of international profit \[2\]. System sales grew **6%**, and adjusting for Middle East impact, growth is **8–9%** \[2\]. Regions like Latin America and Africa saw sales up **22%** and **11%**, respectively \[2\]. Net new unit growth was up **10%**, showcasing a strong development pipeline \[2\].

3. **U.S. Brand Performance**  
   **Q:** How are U.S. brands positioned in a tough environment?  
   **A:** Taco Bell, representing **75%** of U.S. operating profit, improved throughout Q1 and is seeing accelerated same-store sales growth into Q2 \[5\]. The Cantina Chicken menu launch has been well received \[5\]. Taco Bell is well-positioned as a value leader, not seeing a fall-off in low-income consumers \[5\]. Pizza Hut U.S. showed positive two-year trends and expects a strong calendar ahead \[5\]. While KFC U.S. is struggling, management is working to reset the brand domestically \[5\].

4. **G&A Expense Outlook**  
   **Q:** What's driving the decrease in G&A expenses?  
   **A:** G&A expenses are expected to be flat to slightly down on a 52-week basis, excluding special items \[0\]. Factors include lapping last year's cyber event and Russia-related costs, as well as resource optimization efforts \[0\]. Investments in digital and technology are becoming more efficient as franchise adoption increases, bending the cost curve \[0\]. The acquisition of U.K. stores will add just under **$10 million** to G&A \[0\].

5. **Digital Impact on Franchisees**  
   **Q:** How are digital initiatives affecting franchisee economics?  
   **A:** Digital deployments lead to increased check sizes and frequency \[4\]. At Taco Bell U.S., digital sales mix grew from essentially zero in 2018 to over **30%** now \[4\]. Technologies like Dragontail for Pizza Hut reduce delivery times by **4 minutes** and increase driver efficiency \[4\]. Strong development momentum reflects improved franchisee economics due to digital investments \[4\].

6. **Long-Term G&A Trajectory**  
   **Q:** Will digital investments lower G&A dollars in future years?  
   **A:** Management anticipates increased leverage on G&A over the long run, expecting G&A as a percentage of system sales to decrease \[3\]. Early investments in digital and technology created pressure on G&A, but as platforms are deployed and adoption increases, the net P&L impact will reduce \[3\]. While investments will continue in areas like AI and data analytics, overall efficiency is expected to improve \[3\].

7. **Unit Growth and AUVs**  
   **Q:** How does unit growth translate into system sales amid lower AUVs?  
   **A:** New units in emerging markets often have lower average unit volumes (AUVs), but they tend to grow faster over time \[6\]. The strategy has successfully built markets like China and India \[6\]. Yum! is also expanding in higher-volume markets like Western Europe \[6\]. The mix will always include varying AUVs, but overall growth is expected to align with long-term objectives \[6\].

8. **Sales Performance vs. Expectations**  
   **Q:** Are sales progressing as expected, and when will comps turn positive?  
   **A:** Q1 sales were generally in line with expectations, slightly weaker due to unanticipated weather impacts in the U.S. \[7\]. Taco Bell is strengthening into Q2, and management remains confident in meeting yearly projections \[7\]. Despite a challenging year, they expect to deliver the **8%** core operating profit growth \[7\].

d39c1bdb1be9d6fcc76dbd83070aecdc8c5327ee71a9c82c5646f4a36c2a4f43

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

**Quarterly guidance for Q4 2024:**
- **Core Operating Profit Growth**: Mid- to high single digits  **[YUM_3405729_8]**  (no prior guidance)  
- **Taco Bell Fourth Quarter Company-Operated Store Margins**: 23% to 24%  **[YUM_3405729_8]**  (no prior guidance)  
- **Net Interest Expense**: Just under $140 million  **[YUM_3405729_8]**  (no prior guidance)

**Annual guidance for 2024:**
- **Unit Growth**: 4.5% to 5.0%  **[YUM_3405729_11]**  (lowered from 5%  **[YUM_3396571_8]** )  

34aa1058523d9e24ec38e0644c4385729d1e30e66d5dff3cb04c2bf8f3d54c94

| Name             | Position                                              | Start Date     | Short Bio                                                                                                                                                                                                 |
|------------------|-------------------------------------------------------|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| David Gibbs      | Chief Executive Officer                               | January 2020   | David Gibbs has been the CEO of YUM! Brands since January 2020. He previously served as President and COO, and has held various roles at YUM since at least 2005, including CEO of the Pizza Hut Division  **[0001041061-24-000011_yum-20231231.htm:50]** **[0001193125-24-088443_d607499ddef14a.htm:12]** .                              |
| Scott Catlett    | Chief Legal and Franchise Officer and Corporate Secretary | July 2020      | Scott Catlett has been the Chief Legal and Franchise Officer and Corporate Secretary since July 2020. He previously served as General Counsel and Corporate Secretary and has been with YUM since 2007  **[0001041061-24-000011_yum-20231231.htm:50]** **[0001041061-23-000009_yum-20221231.htm:46]** .                                    |
| Sean Tresvant    | Chief Executive Officer of Taco Bell Division         | January 2024   | Sean Tresvant became the CEO of the Taco Bell Division in January 2024. He joined Taco Bell in January 2022 as Global Chief Brand Officer and was promoted to Global Chief Brand & Strategy Officer in February 2023  **[0001041061-24-000011_yum-20231231.htm:50]** .                        |
| Aaron Powell     | Chief Executive Officer of Pizza Hut Division         | September 2021 | Aaron Powell has been the CEO of the Pizza Hut Division since September 2021. Before joining YUM, he held various positions at Kimberly-Clark, Bain & Company, and Procter & Gamble  **[0001041061-24-000011_yum-20231231.htm:50]** **[0001041061-23-000009_yum-20221231.htm:46]** .                                                      |
| David Russell    | Senior Vice President, Finance and Corporate Controller | February 2017  | David Russell has been the Senior Vice President, Finance since February 2017 and Corporate Controller since February 2011. He has held various finance roles at YUM since 2008  **[0001041061-24-000011_yum-20231231.htm:50]** **[0001041061-23-000009_yum-20221231.htm:46]** .                                                          |
| Sabir Sami       | Chief Executive Officer of KFC Division               | January 2022   | Sabir Sami has been the CEO of the KFC Division since January 2022. He previously served as COO and Managing Director of KFC Asia and joined YUM in 2009 after roles at Procter & Gamble, Coca-Cola, and Reckitt Benckiser  **[0001041061-24-000011_yum-20231231.htm:50]** **[0001041061-23-000009_yum-20221231.htm:46]** .               |
| Tracy Skeans     | Chief Operating Officer and Chief People Officer      | January 2021   | Tracy Skeans has been the COO since January 2021 and Chief People Officer since January 2016. She was previously the Chief Transformation Officer and President of Pizza Hut International  **[0001041061-24-000011_yum-20231231.htm:51]** **[0001041061-23-000009_yum-20221231.htm:46]** .                                                |
| Christopher Turner | Chief Financial Officer                             | August 2019    | Christopher Turner has been the CFO of YUM since August 2019. He previously held senior roles at PepsiCo and was a partner at McKinsey & Company  **[0001041061-24-000011_yum-20231231.htm:51]** **[0001041061-23-000009_yum-20221231.htm:47]** .                                                                                         |

d5f002e9c14873394d4ae41b214982892250102d3e65185b32e15d44d29d42c3

| Program Details          | Program 1       | Program 2       |
|--------------------------|-----------------|-----------------|
| Approval Date            | September 2022  | **May 2024**  **[0001041061-24-000039_yum-20240930.htm:7]** |
| End Date/Duration        | Expired on June 30, 2024  **[0001041061-24-000039_yum-20240930.htm:7]**  | Through December 31, 2026  **[0001041061-24-000039_yum-20240930.htm:7]**  |
| Total additional amount  | Not specified   | **$2 billion**  **[0001041061-24-000039_yum-20240930.htm:7]**  |
| Remaining authorization amount | **$0**  **[0001041061-24-000039_yum-20240930.htm:7]**  | **$1.7 billion**  **[0001041061-24-000039_yum-20240930.htm:7]**  |
| Details                  | Expired program | Maximize shareholder value by returning excess capital  **[0001041061-24-000039_yum-20240930.htm:7]**  |

d8591b785cb60344f3879616307203ece80f2e54217c11d3bf75abfe6eddfcf1

United States

- Company Sales

- Franchise Revenues

- Property Revenues

- Franchise Contributions for Advertising and Services

China

Other Regions

KFC Division

Pizza Hut Division

Taco Bell Division

India

Total Revenue

f7be86791cfa6c63927fd4f21fe146b75f0fa09aedc27c6b0374718319dc5f66

cedbcdda392f0ac2dc73871fcb41180e832fd21893ae60c142e9030d637d56ec

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 1997  **[0001041061-24-000011_yum-20231231.htm:80]**    | Present  | Current auditor   |
```

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a2011b7ca19103e2c8ba86ed1dcaea7085bf1759e797a16ed0d499002c0db75c

- Total Revenue: $1,826 million (+7% YoY)  **[0001041061-24-000039_yum-20240930.htm:10]** **[0001041061-23-000050_yum-20230930.htm:12]**   
- KFC Division: $785 million (**+12%** YoY)  **[0001041061-24-000039_yum-20240930.htm:10]** **[0001041061-23-000050_yum-20230930.htm:12]**   
- Taco Bell Division: $666 million (+6% YoY)  **[0001041061-24-000039_yum-20240930.htm:10]** **[0001041061-23-000050_yum-20230930.htm:12]**   
- U.S. Company Sales: $203 million vs. $102 million in Q3 2023 (**+99%** YoY)  **[0001041061-24-000039_yum-20240930.htm:10]** **[0001041061-23-000050_yum-20230930.htm:10]**   
- Net Income: $382 million vs. $416 million in Q3 2023 (-8% YoY)  **[0001041061-24-000039_yum-20240930.htm:2]** **[0001041061-23-000050_yum-20230930.htm:2]**   
- Diluted EPS: $1.35 vs. $1.46 in Q3 2023 (-8% YoY)  **[0001041061-24-000039_yum-20240930.htm:7]** **[0001041061-23-000050_yum-20230930.htm:6]**   

0d310bdcda4831a4401bcce74511b5fcd46cfd2a6db9966ff8105dbbd49d2309

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- **Taco Bell's strong performance, with +4% same-store sales growth in the U.S. and positive international same-store sales**, showcases the brand's unique ability to provide innovative value offerings that drive customer engagement and margin growth.  **[YUM_3405729_10]**
- **Successful implementation of AI-driven technologies**, such as personalized marketing campaigns and voice AI in drive-thrus, is enhancing customer experience and operational efficiency, positioning Yum! Brands as a leader in digital innovation within the QSR industry.  **[YUM_3405729_13]**
- Despite challenges, **Yum! Brands achieved 6% core operating profit growth year-to-date**, reflecting the resilience of its business model and the strength of its dual growth engines, with expectations for continued performance driven by digital capabilities and investments in long-term growth.  **[YUM_3405729_9]**

09b94e3188a70f4e62915186f700f2065a14989098e113a742c007426d3dd327

- **Difficulty in forecasting same-store sales growth in the current environment**, leading to reliance on other levers like unit development to meet operating profit targets.  **[YUM_3381838_11]**
- **Dependence on unit growth in emerging markets with lower average unit volumes (AUVs)**, which may suppress system-wide sales growth and impact top-line revenue.  **[YUM_3381838_17]**
- **Significant pressure on G&A expenses due to investments in digital and technology**, with uncertainties about bending the curve on these expenses and potential impact on profitability.  **[YUM_3381838_16]** ,  **[YUM_3381838_10]**

a421672ae723c6fc32850b61134fa3ffc845e8d7736ae74d7b4548c586ed3162

- **Strong digital sales growth of 22%, driving productivity and sales across the business**.  **[YUM_3372179_11]**  The company's digital initiatives are still in the early stages, indicating significant potential for future growth.  **[YUM_3372179_11]**
- **Confident outlook for 2024 with plans for increased innovation, particularly at Taco Bell**, which will have **twice the innovation on the calendar compared to 2023**.  **[YUM_3372179_14]**  This is expected to drive same-store sales growth and gain market share  **[YUM_3372179_14]** **[YUM_3372179_15]** .
- **Robust development pipeline with franchisees getting great returns**, leading to sustained unit growth.  **[YUM_3372179_9]**  The company is **very confident in the pace of development**, with the pipeline "never looked better".  **[YUM_3372179_9]**

48c5c0c42f5ff90975da5fdb74a034339d5fe4368976498eacde4b083d10ab1b

- **Yum! Brands delivered 8% core operating profit growth year-to-date despite negative same-store sales, and remains confident in delivering at least 8% profit growth for the full year**, demonstrating strong financial performance in a challenging environment.  **[YUM_3396571_12]**
- **KFC International achieved 11% two-year same-store sales growth despite Middle East impacts**, and in markets with little impact from the conflict, KFC is seeing mid-single-digit growth, highlighting the strong foundation of the business and resilience of the brand.  **[YUM_3396571_9]** **[YUM_3396571_14]**
- **Taco Bell is maintaining industry-leading margins and strong growth**, leveraging a **35% digital sales mix** and accelerating adoption of technologies like **Voice AI**, which is enhancing customer experience and operational efficiency, setting up for continued strong margins and value to consumers.  **[YUM_3396571_15]**

5d7a7b9767c3194f141bb08bba8e1ab35840947628f8675252369763debd7abb

1. **Operating Profit Growth Outlook**  
   **Q:** Can you elaborate on confidence in meeting the 8% operating profit growth algorithm for 2024?  
   **A:** Management expressed strong confidence in delivering at least **8% core operating profit growth** for 2024, driven by a robust development pipeline, expected sequential improvement in same-store sales, flat G&A expenses, and continued productivity programs. They acknowledged headwinds from the Middle East and a potentially challenging U.S. environment but believe in their trajectory and have levers to pull to ensure they meet their targets.  **[YUM_3372179_10]** **[YUM_3372179_14]** 

2. **Same-Store Sales and Comp Outlook**  
   **Q:** How do you view the comp outlook for 2024, and are you prepared if it doesn't materialize as expected?  
   **A:** Management expects sequential improvement in same-store sales throughout the year, supported by strong positions of KFC International and Taco Bell U.S., and initiatives planned by each brand, including doubling Taco Bell's innovation calendar. They are prepared to manage uncertainties, such as the Middle East situation, and have multiple levers like flat G&A plans and productivity projects to ensure they achieve their profit growth targets.  **[YUM_3372179_10]** **[YUM_3372179_14]** 

3. **Development Outlook**  
   **Q:** What are your expectations for the pace of global development in 2024 and 2025?  
   **A:** The company is very confident in the pace of development, stating that the pipeline has **never looked better**. Franchisees are getting great returns, leading to continued strong growth commitments, including from Yum China and an uptick in Pizza Hut U.S. development. Evolving asset types, like the new satellite Pizza Hut delco store in China, provide additional tailwinds for growth.  **[YUM_3372179_9]** 

4. **Taco Bell Growth Prospects**  
   **Q:** Is Taco Bell expected to widen its market share outperformance in 2024?  
   **A:** Management is excited about Taco Bell's prospects, highlighting a **15% two-year growth** in Q4 despite lapping the Mexican pizza launch. They believe the challenging consumer environment favors Taco Bell, which consistently gains market share. Plans include doubling innovation on the calendar compared to 2023, aiming to drive further growth and outperformance.  **[YUM_3372179_15]** 

5. **Digital Sales Growth Impact**  
   **Q:** How incremental is digital sales growth to overall sales and operations?  
   **A:** Digital capabilities are significantly boosting sales and operational efficiencies, contributing to the **10% global system sales growth** for the full year. Digital initiatives support strong unit economics, expand Easy Operations capabilities, and are becoming more leverageable as they mature. Management believes they are still in the early innings of digital transformation, attracting top talent and quick franchisee adoption.  **[YUM_3372179_11]** 

6. **U.S. Pricing Strategy**  
   **Q:** How are you advising franchisees on pricing in the U.S. given pressures on lower-income consumers?  
   **A:** The company sees positive performance in low-income trade areas, particularly with Taco Bell, which has slightly outperformed expectations. They have tweaked the value menu to **$3 and under**, over-indexing with consumers. While there may be small shifts in consumer behavior, they are confident that offering strong value with innovation will maintain franchisee profitability without slowing down transaction growth.  **[YUM_3372179_12]** **[YUM_3372179_13]** 

7. **Performance of Value Menus**  
   **Q:** How are the value offers performing across your core brands amid consumer trading around the menu?  
   **A:** Value menus are performing well, with the Taco Bell **$3 and under** menu exceeding expectations. The company notes a return to a more normal operating environment where value is crucial. Taco Bell wins on value perception scores and can offer value while maintaining industry-leading margins, which keeps them connected with consumers and supports transaction growth.  **[YUM_3372179_13]** 

8. **Pizza Hut U.S. Comp Outlook**  
   **Q:** Do you expect stabilization in Pizza Hut U.S. comps starting in the second quarter?  
   **A:** Management anticipates Pizza Hut U.S. to be positive for the year despite a challenging lap of the Melts launch in the first quarter. They have several initiatives planned and highlight that Pizza Hut globally hit a new record in net new unit development, contributing to overall growth.  **[YUM_3372179_11]** 

760eee59f0e38dbb341dec2e863e8c4ba117bee4299a9fc29692e4b883116e0d

1. **Operating Profit Growth Outlook**  
   **Q:** How confident are you in achieving 8% profit growth next year?  
   **A:** Christopher Turner acknowledged that they are likely to end below their **8%** operating profit growth target for this year due to sales not meeting expectations in key markets like China and the Middle East, impacted by conflicts.  **[YUM_3405729_9]**  However, he stated they are still working through plans for 2025 and see "no major things that are unusual right now" as they consider that plan.  **[YUM_3405729_9]** 

2. **Net Unit Growth Outlook and Risks**  
   **Q:** Is there risk of not hitting 5% net unit growth this year?  
   **A:** David Gibbs indicated there is risk to the **5%** net unit growth target, with numbers rolling up in the **4.5% to 5.0%** range.  **[YUM_3405729_11]**  Higher closures are attributed to lower-volume stores and impacts from conflicts, particularly in the Middle East.  **[YUM_3405729_11]**  However, they view this as not a widespread issue and expect long-term growth after addressing these challenges.  **[YUM_3405729_11]** 

3. **Managing Profitability Amid Macro Pressures**  
   **Q:** How will you manage profitability if macro pressures continue?  
   **A:** Christopher Turner stated they are still working on the 2025 plan but see "nothing significantly unusual" at this time.  **[YUM_3405729_12]**  He emphasized their twin growth engines continue to perform strongly, and they have made productivity moves this year that will continue to benefit them, despite expected resets of incentive compensation.  **[YUM_3405729_12]** 

4. **Q4 Guidance for Global Same-Store Sales**  
   **Q:** What's the base case for global same-store sales in Q4?  
   **A:** David Gibbs noted it's a difficult environment to forecast sales globally but mentioned that trends seen in Q3 are continuing into Q4.  **[YUM_3405729_10]**  He highlighted the continued momentum of Taco Bell's performance, with positive same-store sales in both the U.S. and internationally.  **[YUM_3405729_10]** 

5. **KFC Q4 Comp Trends**  
   **Q:** How are KFC comps expected in Q4 given macro pressures?  
   **A:** David Gibbs explained that although it's hard to forecast KFC sales due to conflicts affecting certain regions, they haven't yet reached the point where the impacts start to lap.  **[YUM_3405729_15]**  He expects the lap to get better as they pass the one-year anniversary of the conflict, which should lead to a change in the trajectory of KFC sales.  **[YUM_3405729_15]** 

6. **AI-Enabled Digital Initiatives**  
   **Q:** Can you give more color on AI marketing and drive-thrus?  
   **A:** Christopher Turner discussed their AI-driven marketing, enabling personalized offers and rapid refinement using their massive data assets.  **[YUM_3405729_13]**  On AI voice drive-thrus, he noted the results have been outstanding, improving customer experience and team member satisfaction, with rollout pace faster than originally envisioned due to operator and franchisee enthusiasm.  **[YUM_3405729_13]** 

7. **Potential for Fee Collection from Franchisees**  
   **Q:** Can you improve G&A by collecting fees from franchisees?  
   **A:** David Gibbs stated their goal with technology is to provide franchisees the best tech at the lowest possible cost.  **[YUM_3405729_14]**  By offering technologies like voice AI at lower costs than competitors, they believe franchisees will see benefits in sales and margins, leading to more store builds and top-line growth.  **[YUM_3405729_14]** 

8. **Taco Bell Value Positioning**  
   **Q:** How did Taco Bell protect and expand value positioning?  
   **A:** David Gibbs highlighted that Taco Bell can offer unique value products that competitors can't, which helps franchisee margins.  **[YUM_3405729_10]**  He mentioned the launch of the decades menu and the **$7 Lux Box** as ways to bring innovation and value to consumers.  **[YUM_3405729_10]** 

eef0d306123a0286f37ca760e9e5895dd591eb80f902a049637a28b7b41e182b

- Yum! Brands remains confident in delivering at least **8% core operating profit growth** despite a challenging environment, demonstrating the resilience of their business model and the talent of their leaders.  **[YUM_3381838_11]**
- The company's investments in digital and technology platforms are expected to drive operating efficiencies and lead to increased G&A leverage over time, supporting long-term growth.  **[YUM_3381838_13]**
- Strong international growth in **KFC International**, with system sales up **22% in Latin America** and **11% in Africa**, is driving system sales and unit growth.  **[YUM_3381838_12]**

388a36789761171f45afa5fa69a0d73d7a0cc97b82d1cbad15cad198c77e7654

- **Yum! Brands expects top-line trends in Q1 2024 to be the most challenged**, with same-store sales trends impacted by tougher laps and ongoing headwinds, indicating potential slow growth at the start of the year.  **[YUM_3372179_8]** **[YUM_3372179_12]**
- **Sales trends decelerated during the quarter in several markets due to the conflict in the Middle East**, which has created uncertainty and is expected to continue impacting sales in key markets into 2024.  **[YUM_3372179_1]** **[YUM_3372179_14]**
- **Pizza Hut U.S. same-store sales declined 4% in the quarter**, and the brand faces another challenging lap in Q1, suggesting sustained difficulties in reviving growth in this segment.  **[YUM_3372179_3]** **[YUM_3372179_11]**

a2a457ae207bd3e570520f28e0686d4d90f28f29018e8b7ef73fb6b1be45aa55

- **Yum! Brands faces significant uncertainty and a complex operating environment due to the extended impact of the Middle East conflict, affecting same-store sales in multiple markets beyond the Middle East, including Indonesia and Malaysia.** The company acknowledges that the impact is hard to measure and could be broader than anticipated.  **[YUM_3396571_9]** ,  **[YUM_3396571_14]** ,  **[YUM_3396571_13]**
- **Same-store sales have been negative year-to-date**, and the company is relying on **easier comparisons in the second half**, particularly in Q4, to deliver sequential improvements. This raises concerns about underlying growth without such favorable comparisons.  **[YUM_3396571_12]** ,  **[YUM_3396571_9]**
- **Sustainability concerns over Taco Bell's strong margins due to labor pressures**, especially in California, and a consumer shift towards value offerings, which could pressure margins in the future. The company relies on technology initiatives to maintain margins, but the effectiveness of these measures remains uncertain.  **[YUM_3396571_10]** ,  **[YUM_3396571_15]**

617f4e26fb07d05033055bd072977af0dfe4e699f5016bb8a66e181375dd340e

- Yum! Brands faces a potential risk of not achieving its targeted **5% net new unit growth** this year, with current projections between **4.5% and 5.0%**, due to elevated closures and challenging global conditions.  **[YUM_3405729_11]**
- Approximately **two-thirds** of the deceleration in net new unit growth stems from markets directly or indirectly impacted by conflicts, particularly in the **Middle East**, leading to weakness in those regions.  **[YUM_3405729_11]**
- Some **smaller franchisees are struggling financially** in conflict-affected areas, leading to **elevated closures** and the need to transition businesses, which may result in complexities and potential onetime accounting adjustments.  **[YUM_3405729_11]**

cbefe4bc4a8993ad15cb6b69c0f76cf9cf9970ea35d8c92913c4f7e17adffb74

1. **Sales Outlook**  
   **Q:** How will same-store sales progress given macro uncertainties?  
   **A:** Management expects sequential improvement in same-store sales growth each quarter, with easier comparisons in Q4 as they lap the Middle East conflict. Despite a choppy environment, they are optimistic due to strong brand performance, such as KFC International being up **11%** on a two-year basis despite Middle East impacts.  **[YUM_3396571_9]** 

2. **Profit Guidance**  
   **Q:** Can profit growth accelerate in the second half beyond 8% guidance?  
   **A:** Management remains confident in delivering at least **8%** core operating profit growth for the full year. While acknowledging a complex operating environment with unknowns, they are focused on driving both short-term and long-term growth simultaneously.  **[YUM_3396571_12]** 

3. **Taco Bell Margins**  
   **Q:** How sustainable are Taco Bell's margin improvements?  
   **A:** Taco Bell's impressive margins are sustainable due to leveraging scale in food purchases and increasing productivity. With a **35% digital mix** and accelerating adoption of technologies like Voice AI, management believes they can continue to provide strong value to consumers and maintain industry-leading margins.  **[YUM_3396571_15]** 

4. **Middle East Impact**  
   **Q:** What is the broader impact of Middle East issues on sales?  
   **A:** While the Middle East, Indonesia, and Malaysia are significantly impacted, management notes it's hard to measure precise impacts elsewhere. Despite challenges, KFC achieved **11%** two-year same-store sales growth globally. Excluding impacted regions, KFC saw mid-single-digit growth, and Latin America reported **23%** same-store sales growth over two years.  **[YUM_3396571_14]** 

5. **Global Unit Development**  
   **Q:** How are franchises managing challenges to continue global growth?  
   **A:** The development outlook is encouraging with about **two-thirds** of brand-country combinations opening a store in the past 12 months. Gross unit openings are expected to be similar to **2022 and 2023**, showing franchisees' confidence in the brands and good returns on investments despite macro pressures.  **[YUM_3396571_13]** 

6. **G&A Expenses**  
   **Q:** How will G&A trends unfold, especially into 2025?  
   **A:** Management is reallocating and streamlining G&A to drive efficient growth, including one-time benefits this year and maturing digital capabilities. Despite reinvesting in areas like AI with **40+ AI projects** in motion, they expect to continue gaining leverage on G&A and anticipate a normal growth rate for G&A in 2025 and beyond.  **[YUM_3396571_10]** 

7. **Taco Bell Sales Strength**  
   **Q:** How will Taco Bell retain sales strength amid value focus?  
   **A:** Taco Bell leverages its always-on value menu with **10 unique items** and promotional offerings like the **$7 Lux Box**. Continuing innovation with Cantina Chicken and improvements in speed of service and loyalty programs bolster management's confidence in maintaining strong sales trends.  **[YUM_3396571_11]** 

7535ff044aa5a7cea4785ae19098a58a8d6b511c5d282c422fba51319def814c

Yum! Brands Inc (YUM)

Financials