10% System Sales Growth Excluding Russia Impact;

Led by 5% Same-Store Sales Growth with 979 Gross Unit Openings

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Yum! Brands, Inc. (NYSE: YUM) today reported results for the third quarter ended September 30, 2022. Worldwide system sales excluding foreign currency translation grew 7%, with 5% same-store sales growth and 4% unit growth. Third quarter GAAP operating profit grew 4%. Third quarter core operating profit grew 8% including a 3-point headwind from Russia. Third quarter GAAP EPS was $1.14 and third quarter EPS excluding Special Items was $1.09. Our year-over-year EPS excluding Special Items results reflect a $0.23 negative impact from a higher current year tax rate, lower investment gains and the removal of Russia-based profits. Foreign currency translation also unfavorably impacted our EPS by $0.10.

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DAVID GIBBS COMMENTS

David Gibbs, CEO, said “I’m pleased to report another strong quarter for Yum!, with system sales growth of 10% excluding Russia, driven by strong demand for our iconic brands, increased digital adoption and continued momentum on unit development. Our three global brands delivered widespread system sales growth, once again demonstrating that our globally diversified business, led by our world-class teams and franchisees, can thrive in any environment.”

RUSSIA UPDATE

• As previously announced, Yum! entered into a sale and purchase agreement to transfer ownership of our Russian KFC restaurants, operating system and master franchise rights, including the network of KFC franchised restaurants, to Smart Service Ltd., a business operated by one of our existing KFC franchisees in Russia. Under the agreement, the buyer will be responsible for rebranding locations to a non-Yum! concept and retaining employees in Russia. Completion of the transaction is subject to regulatory and governmental approvals, as well as other conditions. Following the completion of the transaction, we will have ceased our corporate presence in Russia.
• As of the beginning of the second quarter, we elected to remove Russia from our unit count and system sales, negatively impacting those key performance metrics as presented in our THIRD-QUARTER HIGHLIGHTS section and the remainder of this release.
• Removing Russia from our prior year base, key performance metrics would have been as follows:

THIRD-QUARTER HIGHLIGHTS

• Worldwide system sales grew 7%, excluding foreign currency translation, with KFC at 8%, Taco Bell at 9% and Pizza Hut 4%.
• We added 979 gross units during the third quarter resulting in 644 net-new units.
• Russia units are excluded from our same-store sales results for the quarter.
• Reported digital sales of approximately $6 billion, with digital mix exceeding 40%.
• Foreign currency translation unfavorably impacted divisional operating profit by $39 million.

All comparisons are versus the same period a year ago.

System sales growth figures exclude foreign currency translation ("F/X") and core operating profit growth figures exclude F/X and Special Items. Special Items are not allocated to any segment and therefore only impact worldwide GAAP results. See reconciliation of Non-GAAP Measurements to GAAP Results in our Condensed Consolidated Summary of Results for further details.

Digital system sales includes all transactions where consumers at system restaurants utilize ordering interaction that is primarily facilitated by automated technology.

KFC DIVISION

• As of the beginning of the second quarter, we removed 1,112 units in Russia from our global KFC unit count, or 4% of units.
• KFC Division opened 485 gross new restaurants in 56 countries.
• KFC Division ex-China same-store sales grew 9%.
• As a result of our decision to exit the Russia business, third-quarter KFC Division system sales growth was negatively impacted by 4 percentage points, KFC International system sales growth was negatively impacted by 5 percentage points and KFC Division operating profit growth excluding foreign currency was negatively impacted by 5 percentage points.
• Foreign currency translation unfavorably impacted operating profit by $33 million.

TACO BELL DIVISION

• Taco Bell Division opened 98 gross new restaurants in 16 countries.
• Taco Bell U.S. system sales grew 8% and Taco Bell International system sales grew 26%.
• Taco Bell U.S. same-store sales grew 7% and Taco Bell International same-store sales grew 5%.
• Company-owned restaurant margins were approximately 24%, slightly above the third quarter last year.
• Foreign currency translation unfavorably impacted operating profit by $1 million.

PIZZA HUT DIVISION

• As of the beginning of the second quarter, we removed 53 units in Russia from our global Pizza Hut unit count.
• Pizza Hut Division opened 392 gross new restaurants in 47 countries.
• Foreign currency translation unfavorably impacted operating profit by $5 million.

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Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.
Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance.
All the strategies assume investments in equity invstrumenta only and are more relevant for "agressive investment profile". Eastern European flagship strategy assumes using up to 20% leverage of total portfolio. GlobalCommodities and US Growth strategy currently assume no leverage.
Results for the Enhanced Investments strategies as compared to the performance of Illustrative Benchmarks is for informational purposes only. Our investment program does not mirror that of the Illustrative Benchmarks and the volatility may be materially different from the volatility of Illustrative Benchmarks. Reference or comparison to an Illustrative Benchmark does not imply that strategies of Enhanced Investments will be constructed in the same way as the Illustrative Benchmark or achieve returns, volatility, or other results similar to those of the Illustrative Benchmark. The S&P 500 is an unmanaged market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.
Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is  for informational and general educational purposes only and is not investment or financial advice.

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