LOUISVILLE, KY. – Mexican pizza’s performance as a limited-time offer in the second quarter ended June 30 earned the item a permanent spot on Taco Bell’s menu.
“Taco Bell’s most loyal fans gained early access, increasing average loyalty signups 15x over the two days of early access and fueling 10% growth in loyal members over the quarter,” said David W. Gibbs, CEO of Yum! Brands, Inc., in an Aug. 3 earnings call. “Demand for Mexican pizza was seven times higher than previous levels, reaching over 20 million pizzas sold nationwide, with some stores selling out within a week, creating a sustained positive halo for the brand. Given the reaction overwhelmingly positive feedback from our customers, we’re excited to bring Mexican pizza back in the fall when it becomes a permanent menu item.
Same-store sales for Taco Bell in the United States jumped 8% in the quarter. Taco Bell’s systemwide sales increased 10%, with increases of 9% in the United States and 31% internationally.
Company-wide same-store sales in the quarter rose 1% after climbing 23% in the second quarter a year earlier. Net income for Louisville-based Yum! fell 43% to $224 million, or 78¢ per share on common stock, from $391 million, or $1.31 per share, in the second quarter a year earlier. Revenue increased 2% from $1.60 billion to $1.64 billion.
A shortage of delivery drivers negatively impacted Pizza Hut’s results.
“At Pizza Hut US, which accounts for 7% of our operating profit, system sales were down 3%, due to flat unit growth and a 4% decline in same-store sales, in largely due to ongoing operational challenges in our delivery business,” said Mr. Gibbs. “We have made progress in expanding the system-wide adoption of third-party delivery as a service for help meet the capacity constraints of our delivery drivers in order to meet consumer demand.”
Yum! removed 53 units in Russia from the global Pizza Hut unit count. In June Yum! has completed the transfer of ownership of its Pizza Hut business in Russia to a local operator who will rebrand the locations to a non-Yum! concept.
Same-store sales fell 1% at KFC. Excluding results in China, where COVID-19 continues to restrict travel, KFC’s same-store sales were up 7%, Gibbs said.
Yum! cut 1,112 units in Russia from its global KFC unit count. Yum! is transferring ownership of its Russian KFC restaurants, operating system and master franchise rights to a local operator who will rebrand the locations to a non-Yum! concept. The decision to exit the Russian business negatively impacted KFC’s year-over-year operating profit growth, excluding foreign currencies, by 4 percentage points.
For the six months ended June 30, Yum! reported net income of $623 million, or $2.16 per share on common stock, down 13% from $717 million, or $2.39 per share, in the same period last year. ‘last year. Six-month net revenue increased 3% to $3.18 billion from $3.09 billion.