KFC-parent Yum Brands tops sales estimates as Taco Bell demand holds firm

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(Reuters) -Yum Brands beat Wall Street estimates for first-quarter comparable sales on Wednesday, helped by robust demand at its Taco Bell locations in the U.S. and KFC outlets in international markets.

The company’s worldwide comparable sales for the first quarter ended March 31 increased 3%, ahead of the average analyst estimate of a 2.76% rise, according to data compiled by LSEG.

The results come at a time when consumer spending on dining out slowed in February and March due to sticky inflation and worries about the Trump administration’s tariff policies.

However, visits to Tex-Mex food chain Taco Bell rose 3.7% in the first quarter in the United States, compared with a 1.6% drop in the overall quick-service restaurants category, according to research firm Placer.ai.

Taco Bell also spruced up its value meal offerings at the start of the year, adding a $9 price point for five menu items.

U.S. consumers have been on the lookout to keep their dine-out spending in check. Taco Bell’s value-meal offer starts at $5 for a 5-layer burrito, a taco, cinnamon twists and a medium fountain drink.

Yum Brands’ KFC international division, which together with Taco Bell makes up more than 80% of the company’s core operating profit, also reported comparable-sales growth of 3%, handily beating estimates of 1.6%.

Total sales in China, its biggest market, grew 3% in the quarter, following a 5% rise in the preceding three-month period.

The Pizza Hut-parent reiterated its long-term annual core operating profit growth target of 8% at a time when companies are tempering their full-year forecasts with consumer sentiment weakening in the United States.

(Reporting by Juveria Tabassum in Bengaluru; Editing by Shounak Dasgupta)