Yum Brands, the parent company of Taco Bell, KFC, and Pizza Hut, reported mixed financial results for the first quarter of 2025, falling short of Wall Street’s revenue expectations due to weaker-than-anticipated performance at Pizza Hut. While the company posted adjusted earnings per share of $1.30—slightly above analysts’ forecast of $1.29—its revenue came in at $1.79 billion, missing the expected $1.85 billion.
The company’s net income dropped to $253 million, or 90 cents per share, compared to $314 million, or $1.10 per share, in the same period last year. This decline was partly attributed to one-time costs, including the ongoing relocation of KFC’s U.S. headquarters to Texas. Despite a 12% increase in net sales and a 3% overall rise in same-store sales across its brands, Pizza Hut remained a weak spot. The pizza chain reported a 2% drop in global same-store sales, significantly underperforming against the 0.1% decline anticipated by analysts. In the U.S., Pizza Hut’s same-store sales fell by a sharp 5%, while international sales remained flat.
Section 2: Taco Bell and KFC Show Strength
While Pizza Hut lagged, other Yum Brands divisions performed more robustly. Taco Bell, the standout in the company’s portfolio, reported an impressive 9% increase in same-store sales, surpassing the expected 8%. This growth underscores Taco Bell’s continued popularity and innovative menu strategies, which have kept it ahead in the competitive fast-food sector.
KFC also posted a modest same-store sales gain of 2%, beating expectations of 1.4%. Much of KFC’s strength comes from its international presence, particularly in China—its largest market—where system sales grew by 3%. However, the U.S. segment of KFC is facing headwinds. Domestic same-store sales dipped by 1%, reflecting intensifying competition in the fried chicken category. Chains like Wingstop and Raising Cane’s have now overtaken KFC in U.S. sales rankings, according to Circana’s 2025 industry data.
Shifts in Strategy and Leadership
Yum Brands is increasingly leveraging digital channels, with digital orders accounting for 55% of total sales this quarter. These include transactions via mobile apps, in-store kiosks, and online platforms—demonstrating the company’s strategic pivot toward tech-enabled consumer experiences.
Meanwhile, a major leadership change is on the horizon. In late March, CEO David Gibbs announced his intention to retire in the first quarter of 2026. The company’s board of directors has initiated the search for his successor, signaling a significant transition at the top during a period of shifting brand dynamics and evolving market pressures.
Although Yum Brands has managed to deliver strong performances through Taco Bell and select international KFC markets, the continued struggles of Pizza Hut and weakening domestic momentum at KFC present challenges the next leadership will need to address. As consumer preferences shift and competition intensifies, Yum’s ability to revitalize its legacy brands will be key to its long-term growth.
