Fast-food company Yum! Brands (NYSE:YUM) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 11.8% year on year to $1.79 billion. Its non-GAAP profit of $1.30 per share was 1.4% above analysts’ consensus estimates.

Is now the time to buy YUM? Find out in our full research report (it’s free).

  • Revenue: $1.79 billion vs analyst estimates of $1.83 billion (11.8% year-on-year growth, 2.6% miss)

  • Adjusted EPS: $1.30 vs analyst estimates of $1.28 (1.4% beat)

  • Adjusted EBITDA: $620 million vs analyst estimates of $636.1 million (34.7% margin, 2.5% miss)

  • Operating Margin: 30.7%, down from 32.5% in the same quarter last year

  • Free Cash Flow Margin: 18.6%, down from 19.6% in the same quarter last year

  • Locations: 60,886 at quarter end, up from 59,129 in the same quarter last year

  • Same-Store Sales rose 3% year on year (-3% in the same quarter last year)

  • Market Capitalization: $40.83 billion

Yum! Brands’ first quarter results showed sales growth driven by strong performances from Taco Bell U.S. and KFC International, while Pizza Hut and Habit Burger faced more muted trends. Management attributed this momentum to increased digital engagement—particularly through the Byte by Yum! digital platform—and successful marketing campaigns that broadened customer appeal. CEO David Gibbs highlighted, “Taco Bell saw a significant expansion in consumer penetration, reflecting our efforts to elevate our positioning and broaden our relevance.”

Looking ahead, management emphasized ongoing investments in artificial intelligence and technology partnerships, such as the new collaboration with NVIDIA, as key pillars for future growth. Gibbs added that these digital initiatives, combined with continued menu innovation and international expansion, are expected to support operating profit targets despite economic uncertainty and a competitive environment. The company is also preparing for a leadership transition, with Gibbs set to retire next year, stressing that “the business is in a position of strength” for a smooth handover.

Yum! Brands’ management discussed the factors behind the company’s first quarter performance and outlined key strategic initiatives shaping the business. Deviation from Wall Street’s expectations was primarily due to revenue falling short amid ongoing investments and selective softness in some brands.

  • Taco Bell’s Value and Innovation: Taco Bell U.S. achieved notable same-store sales growth driven by value menu offerings and new product launches, including the Luxe Box lineup and specialty beverages like those at the Live Mas Cafe test.

  • KFC International’s Expansion: KFC International continued its footprint growth, opening 554 new locations, and posted traffic gains in core markets such as China and Korea, fueled by menu innovation and value-focused promotions.

  • Digital Transformation: The Byte by Yum! digital platform expanded across brands, increasing digital sales and engagement. Management cited upcoming AI-driven personalization and operational tools as core to restaurant efficiency and customer experience.

  • Leadership Changes: Meg Farren was appointed President of Taco Bell North America, and Catherine Tan-Gillespie became President of KFC U.S., both expected to drive operational improvements and brand growth.

  • NVIDIA Partnership: A partnership with NVIDIA aims to accelerate AI capabilities in drive-thru automation, computer vision, and analytics, supporting Yum! Brands’ goal of making AI integral to restaurant operations.