olivLaw · US equity research
Yum! Brands, Inc. YUM
Retail-Eating Places · SIC 5812 · Vertical: Retail-Eating Places (SIC 5812)
YUM Brands is one of the largest franchisors of quick service restaurants in the world, with over 63,000 restaurants at the end of fiscal 2025. About 97% of units are operated by franchisees, so the model relies heavily on franchise fee income. In the second quarter of 2026, system sales grew 5% excluding foreign currency translation, and in June 2026 the company agreed to sell the Pizza Hut brand.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 04 Nov 2026, Yum! Brands, Inc. (YUM) stock was 166.31 USD (+5.92% on the day), with market capitalisation 45.4 bn USD, P/E 20.9 on diluted EPS of 7.94 USD over the last 12 months, dividend yield 1.76%, beta 0.31, 52-week range 135.75–168.16 USD. Latest reported quarter (Q2 2026): revenue of 2.2 bn USD (+12.2% YoY), net income of 853.0 m USD (+128.1% YoY), diluted EPS 3.08 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 77.7
- overbought (≥ 70)
- Bollinger (20, 2)
- 141.14 – 161.52
- above the upper band · %B 1.24 · band width 13.5%
- SMA 50 / 200
- 146.43 / 153.48
- mixed trend
- MACD (12, 26, 9)
- 4.05 / 2.74
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +21.4% | −1.1% | +22.5 pp | — |
| 3 months | +9.1% | −0.5% | +9.6 pp | — |
| 6 months | +6.6% | +4.4% | +2.2 pp | — |
| Year to date | +9.9% | +12.3% | −2.4 pp | — |
| 1 year | +11.2% | +13.5% | −2.3 pp | +3.2% |
| 3 years | +31.6% | +76.4% | −44.8 pp | −18.1% |
| 5 years | +31.3% | +63.7% | −32.4 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q2 2026 · 30 Jun 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 1.8 bn | 2.4 bn | 1.8 bn | 1.9 bn | 2.0 bn | 2.5 bn | 2.1 bn | 2.2 bn |
| Cost of revenue | 523.0 m | 727.0 m | 520.0 m | 560.0 m | 587.0 m | 815.0 m | 677.0 m | 700.0 m |
| Operating income | 619.0 m | 657.0 m | 548.0 m | 622.0 m | 666.0 m | 738.0 m | 644.0 m | 655.0 m |
| Depreciation & amortisation | 44.0 m | 55.0 m | 45.0 m | 44.0 m | 50.0 m | 67.0 m | 60.0 m | 60.0 m |
| Pre-tax income | 502.0 m | 528.0 m | 429.0 m | 499.0 m | 541.0 m | 607.0 m | 516.0 m | 533.0 m |
| Income tax | 120.0 m | 105.0 m | 176.0 m | 125.0 m | 144.0 m | 72.0 m | 84.0 m | -320.0 m |
| Net income | 382.0 m | 423.0 m | 253.0 m | 374.0 m | 397.0 m | 535.0 m | 432.0 m | 853.0 m |
| Diluted EPS | 1.35 | 1.48 ≈ | 0.90 | 1.33 | 1.41 | 1.90 ≈ | 1.55 | 3.08 |
| Operating cash flow | 471.0 m ≈ | 513.0 m | 404.0 m | 446.0 m ≈ | 543.0 m ≈ | 617.0 m | 416.0 m | 507.0 m ≈ |
| Capex | 52.0 m ≈ | 106.0 m | 71.0 m | 71.0 m ≈ | 94.0 m ≈ | 135.0 m | 75.0 m | 100.0 m ≈ |
| Dividends paid | 188.0 m ≈ | 187.0 m | 198.0 m | 197.0 m ≈ | 197.0 m ≈ | 197.0 m | 207.0 m | 206.0 m ≈ |
| Share repurchases | 277.0 m ≈ | 114.0 m | 229.0 m | 109.0 m ≈ | 36.0 m ≈ | 178.0 m | 185.0 m | 489.0 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 30 percentile of its own 43-quarter history (min 15.4, median 24.2, max 36.9; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 5.7 bn | 5.6 bn | 5.7 bn | 6.6 bn | 6.8 bn | 7.1 bn | 7.5 bn | 8.2 bn |
| Revenue YoY | −3.2% | −1.6% | +1.0% | +16.5% | +3.9% | +3.4% | +6.7% | +8.8% |
| Net income | 1.5 bn | 1.3 bn | 904.0 m | 1.6 bn | 1.3 bn | 1.6 bn | 1.5 bn | 1.6 bn |
| Net income YoY | +15.1% | −16.1% | −30.1% | +74.2% | −15.9% | +20.5% | −7.0% | +4.9% |
| Diluted EPS | 4.69 | 4.14 | 2.94 | 5.21 | 4.57 | 5.59 | 5.22 | 5.55 |
| Diluted EPS YoY | +24.4% | −11.7% | −29.0% | +77.2% | −12.3% | +22.3% | −6.6% | +6.3% |
| net % | 27.1% | 23.1% | 16.0% | 23.9% | 19.4% | 22.6% | 19.7% | 19.0% |
| Free cash flow | 942.0 m | 1.1 bn | 1.1 bn | 1.5 bn | 1.1 bn | 1.3 bn | 1.4 bn | 1.6 bn |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 709.0 m USD
- Financial debt
- 38.0 m USD
- Net debt
- -671.0 m USD
- Equity
- -7.3 bn USD
- Total assets
- 8.2 bn USD
- Debt / equity
- unavailable
- Current ratio
- 1.35x
- ROE
- unavailable
- ROA
- 20.9%
- FCF margin
- 20.0%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 5.7 bn | 6.6 bn | 6.8 bn | 7.1 bn | 7.5 bn | 8.2 bn | SEC (XBRL)· 20 Feb 2026verified |
| Cost of revenue | 1.5 bn | 1.7 bn | 1.7 bn | 1.8 bn | 2.1 bn | 2.5 bn | SEC (XBRL)· 20 Feb 2026verified |
| Gross profit | 4.1 bn ≈ | 4.9 bn ≈ | 5.1 bn ≈ | 5.3 bn ≈ | 5.4 bn ≈ | 5.7 bn ≈ | SEC (XBRL)· 20 Feb 2026derived |
| Operating income | 1.5 bn | 2.1 bn | 2.2 bn | 2.3 bn | 2.4 bn | 2.6 bn | SEC (XBRL)· 20 Feb 2026verified |
| Depreciation & amortisation | 146.0 m | 164.0 m | 146.0 m | 153.0 m | 175.0 m | 206.0 m | SEC (XBRL)· 20 Feb 2026verified |
| EBITDA | 1.6 bn ≈ | 2.3 bn ≈ | 2.3 bn ≈ | 2.5 bn ≈ | 2.6 bn ≈ | 2.8 bn ≈ | SEC (XBRL)· 20 Feb 2026derived |
| Interest expense | 558.0 m | 551.0 m | 558.0 m | 602.0 m | 542.0 m | 544.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Pre-tax income | 1.0 bn | 1.7 bn | 1.7 bn | 1.8 bn | 1.9 bn | 2.1 bn | SEC (XBRL)· 20 Feb 2026verified |
| Income tax | 116.0 m | 99.0 m | 337.0 m | 221.0 m | 414.0 m | 518.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Net income | 904.0 m | 1.6 bn | 1.3 bn | 1.6 bn | 1.5 bn | 1.6 bn | SEC (XBRL)· 20 Feb 2026verified |
| Diluted EPS | 2.94 | 5.21 | 4.57 | 5.59 | 5.22 | 5.55 | SEC (XBRL)· 20 Feb 2026verified |
| Weighted average diluted shares | 307.0 m | 302.0 m | 290.0 m | 285.0 m | 285.0 m | 281.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Dividend per share | 1.88 | 2.00 | 2.28 | 2.42 | 2.68 | 2.84 | SEC (XBRL)· 20 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Revenue − Cost of revenue; Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 730.0 m | 486.0 m | 367.0 m | 512.0 m | 616.0 m | 709.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Current assets | 1.7 bn | 1.5 bn | 1.6 bn | 1.6 bn | 1.9 bn | 2.0 bn | SEC (XBRL)· 20 Feb 2026verified |
| Property, plant & equipment, net | 1.2 bn | 1.2 bn | 1.2 bn | 1.2 bn | 1.3 bn | 1.6 bn | SEC (XBRL)· 20 Feb 2026verified |
| Goodwill | 597.0 m | 657.0 m | 638.0 m | 642.0 m | 736.0 m | 969.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Intangibles (excl. goodwill) | 343.0 m | 359.0 m | 354.0 m | 377.0 m | 416.0 m | 909.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Total assets | 5.9 bn | 6.0 bn | 5.8 bn | 6.2 bn | 6.7 bn | 8.2 bn | SEC (XBRL)· 20 Feb 2026verified |
| Accounts payable | 1.2 bn | 1.3 bn | 1.3 bn | 1.2 bn | 1.2 bn | 1.4 bn | SEC (XBRL)· 20 Feb 2026verified |
| Short-term debt | 453.0 m | 68.0 m | 398.0 m | 53.0 m | 27.0 m | 38.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Current liabilities | 1.7 bn | 1.4 bn | 1.7 bn | 1.3 bn | 1.3 bn | 1.5 bn | SEC (XBRL)· 20 Feb 2026verified |
| Total liabilities | 13.7 bn | 14.3 bn | 14.7 bn | 14.1 bn | 14.4 bn | 15.5 bn | SEC (XBRL)· 20 Feb 2026verified |
| Equity | -7.9 bn | -8.4 bn | -8.9 bn | -7.9 bn | -7.6 bn | -7.3 bn | SEC (XBRL)· 20 Feb 2026verified |
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 1.3 bn | 1.7 bn | 1.4 bn | 1.6 bn | 1.7 bn | 2.0 bn | SEC (XBRL)· 20 Feb 2026verified |
| Capex | 160.0 m | 230.0 m | 279.0 m | 285.0 m | 257.0 m | 371.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Free cash flow | 1.1 bn ≈ | 1.5 bn ≈ | 1.1 bn ≈ | 1.3 bn ≈ | 1.4 bn ≈ | 1.6 bn ≈ | SEC (XBRL)· 20 Feb 2026derived |
| Investing cash flow | -335.0 m | -173.0 m | -202.0 m | -107.0 m | -422.0 m | -1.0 bn | SEC (XBRL)· 20 Feb 2026verified |
| Financing cash flow | -738.0 m | -1.8 bn | -1.3 bn | -1.4 bn | -1.2 bn | -924.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Dividends paid | 566.0 m | 592.0 m | 649.0 m | 678.0 m | 752.0 m | 789.0 m | SEC (XBRL)· 20 Feb 2026verified |
| Share repurchases | 239.0 m | 1.6 bn | 1.2 bn | 50.0 m | 441.0 m | 552.0 m | SEC (XBRL)· 20 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 56 / 100
A scoring methodology on indicators and valuation, not investment advice.
(margin_of_safety <= -0.25 & agreement in ['high', 'medium'])
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 45.4 bn USD
Key indicators
Coverage and freshness
Score by group
- Valuation47
- Balance sheet50
- Quality81
- Growth48
- Returns72
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 37.32 – 258.04 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)102.39 – 162.42 (Mid 125.58)WACC 9.1% · starting FCFF 2.1 bn USD · terminal value share of EV 74%The WACC × g sensitivity gives the method's bounds; these are not probabilities.Reverse DCF: starting growth implied by the price (fading linearly to terminal growth, everything else fixed): 18.7%
- Peers: EV/EBITDA69.23 – 169.59 (Mid 95.54)21 companies used · median multiple 9.6x · quartiles 7.2x – 16.5xARCO, ARMK, BDL, BLMN, CAKE, CBRL, DRI, FWRG, GTIM, LOCO, MCD, NATH, NDLS, PLAY, PTLO, PZZA, QSR, STKS, TXRH, WING, YUMC
- Peers: P/E119.75 – 258.04 (Mid 173.39)22 companies used · median multiple 21.8x · quartiles 15.1x – 32.5xARCO, ARMK, BDL, BLMN, CAKE, CBRL, CMG, DRI, EAT, FWRG, GTIM, JACK, LOCO, MB, MCD, NATH, PTLO, PZZA, QSR, TXRH, WING, YUMC
- Dividend discount (DDM)37.32 – 50.19 (Mid 42.81)
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Unattractive profile · Score 56/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | unavailable | unavailable | — |
| Net margin · Quality | 25.4% | 97 (vs peers) | 7% |
| FCF conversion · Quality | 75.7% | 65 (on a fixed band) | 7% |
| Revenue CAGR 3Y · Growth | 6.3% | 52 (on a fixed band) | 9% |
| EPS CAGR 3Y · Growth | 6.7% | 45 (on a fixed band) | 9% |
| Net debt / EBITDA · Balance sheet | 0.7x | 68 (vs peers) | 12% |
| Interest coverage · Balance sheet | 5.0x | 53 (on a fixed band) | 7% |
| Current ratio · Balance sheet | 0.6x | 0 (on a fixed band) | 5% |
| P/E (TTM) · Valuation | 20.9x | 62 (vs peers) | 12% |
| EV/EBITDA · Valuation | 16.2x | 32 (vs peers) | 12% |
| FCF yield · Valuation | 3.7% | 46 (on a fixed band) | 9% |
| Shareholder yield (distributions) · Returns | 3.7% | 53 (on a fixed band) | 7% |
| Payout ratio (FCF) · Returns | 48.1% | 100 (on a fixed band) | 5% |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet50/100 · 3/3 factors with a value
- Growth48/100 · 2/2 factors with a value
- Quality81/100 · 2/3 factors with a value
- Returns72/100 · 2/2 factors with a value
- Valuation47/100 · 3/3 factors with a value
Memo
YUM! BRANDS, INC. (YUM). Latest full fiscal year: 2025; data up to 2026-06-30.
Figures computed from the financial statements: revenue 8.2 bn USD in 2025; YoY growth 8.8%; net margin 25.4%; net debt/EBITDA 0.7x.
The estimated value range is 85.81–166.00 USD per share (median of 4 methods, agreement: medium); assumptions are illustrative. Against the central value of 110.56 USD, the price of 166.31 USD leaves a potential of -33.5% (value / price − 1) and a margin of safety of -50.4% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 56/100, methodological classification: unattractive profile (score, margin of safety and method agreement together; not a judgement of the right price). Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Net margin: 25.4%
- Payout ratio (FCF): 48.1%
What contradicts it
- Current ratio: 0.6x
- The price is above the estimated value range
Not assessed (insufficient data or a ratio without meaning): ROIC.
Versus the vertical median
Retail-Eating Places (SIC 5812) · same industry (4-digit SIC) · compared with 39 companies
The size band was not applied: too few companies would have remained; the vertical includes much smaller or larger companies.
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| MCDMcDONALD’S CORPORATION | 198.3 bn | 0.0 | — | 31.7% | +3.7% | −10% / −1% |
| YUMYum! Brands, Inc. | 45.4 bn | 20.9 | — | 25.4% | +8.8% | +11% / +32% |
| CMGChipotle Mexican Grill, Inc. | 44.5 bn | 32.9 | 48.5% | 10.8% | +5.4% | +2% / −20% |
| DRIDarden Restaurants, Inc. | 26.1 bn | 22.5 | 55.1% | 8.8% | +9.4% | +28% / +47% |
| QSRRestaurant Brands International Inc. | 24.8 bn | 18.2 | 53.8% | 20.1% | +12.2% | +8% / +10% |
| YUMCYum China Holdings, Inc. | 17.0 bn | 18.3 | 17.5% | 7.8% | +4.4% | +3% / +15% |
| ARMKAramark | 13.8 bn | 36.7 | 11.8% | 1.9% | +6.4% | +41% / +87% |
| TXRHTexas Roadhouse, Inc. | 12.9 bn | 31.3 | 28.1% | 6.8% | +9.4% | +12% / +75% |
| EATBrinker International, Inc. | 9.2 bn | 19.4 | 134.7% | 8.4% | +7.9% | +43% / +512% |
| CAVACAVA Group, Inc. | 7.2 bn | 109.3 | 8.3% | 4.8% | +22.4% | +27% / +82% |
| HDLSuper Hi International Holding Ltd. | 6.4 bn | 247.5 | 6.9% | 2.8% | +13.4% | −46% / unavailable |
| CAKEThe Cheesecake Factory Incorporated | 5.8 bn | 27.4 | 41.6% | 5.2% | +4.7% | +142% / +268% |
| WINGWingstop Inc. | 4.5 bn | 39.3 | — | 16.0% | +11.4% | −37% / −30% |
| CBRLCracker Barrel Old Country Store, Inc. | 1.6 bn | 50.2 | 6.7% | 1.0% | −4.7% | +143% / +5% |
| ARCOArcos Dorados Holdings Inc. | 1.5 bn | 7.0 | 33.2% | 4.5% | +4.7% | −7% / −39% |
| SGSweetgreen, Inc. | 1.1 bn | 117.9 | 3.1% | 2.0% | +0.4% | +82% / +25% |
| BLMNBloomin’ Brands, Inc. | 939.3 m | 35.1 | 6.7% | 0.7% | +0.1% | +55% / −53% |
| FWRGFirst Watch Restaurant Group, Inc. | 833.3 m | 42.1 | 3.1% | 1.5% | +20.3% | −27% / −25% |
| PZZAPapa John’s International, Inc. | 658.1 m | 25.1 | — | 1.4% | −0.3% | −52% / −69% |
| LOCOEl Pollo Loco Holdings, Inc. | 501.2 m | 14.1 | 11.8% | 7.0% | +3.6% | +51% / +98% |
| DINDine Brands Global, Inc. | 448.6 m | 106.7 | — | 0.4% | +8.2% | +17% / −16% |
| NATHNathan's Famous, Inc. | 418.2 m | 21.1 | — | 11.8% | +9.4% | −4% / +56% |
| PTLOPortillo's Inc. | 336.8 m | 29.8 | 3.0% | 1.9% | +3.0% | +4% / −65% |
| PLAYDave & Buster’s Entertainment, Inc. | 305.8 m | — | -69.7% | -4.3% | −1.4% | −50% / −79% |
| JACKJack In The Box Inc. | 275.6 m | 8.2 | — | 2.4% | −6.7% | −27% / −80% |
1- and 3-year price returns: for YUM from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 102.33 Total return -37% · Per year -37% | 180.76 Total return 11% · Per year 11% | 272.07 Total return 66% · Per year 66% |
| 3 years | 102.90 Total return -34% · Per year -13% | 204.18 Total return 29% · Per year 9% | 336.91 Total return 110% · Per year 28% |
| 5 years | 103.48 Total return -31% · Per year -7% | 230.64 Total return 49% · Per year 8% | 417.22 Total return 165% · Per year 22% |
- Exit P/E± 51.05
- Net margin± 35.73
- Annual revenue growth± 28.84
- Annual dilution± 3.00
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 05 Aug 2026; since then the company filed 8-K (03 Nov 2026 · results).
In brief
YUM Brands is one of the largest franchisors of quick service restaurants in the world, with over 63,000 restaurants at the end of fiscal 2025 1. About 97% of units are operated by franchisees 1, so the model relies heavily on franchise fee income. In the second quarter of 2026, system sales grew 5% excluding foreign currency translation, and in June 2026 the company agreed to sell the Pizza Hut brand 23.
SWOT
Strengths
- The company has a very large global network with a high share of franchised restaurants, supporting an asset-light model with fee income 1.
- The KFC, Taco Bell and Pizza Hut brands are global category leaders, and the brands carry significant value for the company 1.
- The digital platform and ordering system account for a large share of sales, giving scale advantages over smaller rivals 13.
Weaknesses
- The company relies heavily on franchisees, and their financial difficulties could affect development and income 1.
- Pizza Hut has underperformed in recent years, and its operating profit declined in fiscal 2025 and the first half of 2026 13.
- Exposure to China through Yum China means dependence on one major partner with political and economic risks 1.
Opportunities
- Selling Pizza Hut could let the company focus on KFC and Taco Bell, brands with stronger growth 3.
- Extending the Byte by Yum! platform to more franchisees could improve restaurant economics and digital sales 13.
- The long-term targets for unit growth and system sales growth provide a framework for future investment if achieved 3.
Threats
- Food safety incidents or foodborne illness could damage reputation and sales across the brands 1.
- Rising costs of chicken, cheese and packaging could reduce margins for franchisees and the company 1.
- Competition from delivery platforms and supermarkets could reduce restaurant share of the food market 1.
Risks
- Food safetyhigh
Food safety or contamination problems can create negative publicity, litigation and government investigations affecting the whole network 1.
- Dependence on franchiseeshigh
Financial difficulties at franchisees could lead to closures, slower development and lease obligations that the company partly guarantees 1.
- Pizza Hut salemedium
The Pizza Hut sale process might not produce the expected outcome, could create costs and management distraction, and could affect near-term results 13.
- China exposuremedium
Operations in mainland China through Yum China expose the company to political, regulatory and economic risks that could affect results 1.
- Catastrophic eventslow
Pandemics, natural disasters, military conflict and avian flu could close restaurants and reduce demand for poultry products 1.
Investment thesis
What would need to be true (bull case)
- If same-store sales growth at KFC and Taco Bell holds, the company could reach its long-term targets for network expansion and revenue 3.
- A franchise-heavy model with fees based on sales can provide relatively stable income if franchisees remain financially sound 1.
- Focusing on two strong brands and the digital platform could improve efficiency and margins over time 3.
What would break the thesis
- If franchisee financial stress rises, network development and fee income could decline 1.
- The Pizza Hut sale might not deliver the expected value, and a declining brand could continue to weigh on profit in the meantime 13.
- Dependence on China and on one major partner could expose the company to unexpected shocks 1.
What to watch
- Completion of the Pizza Hut sale and effect on resultsQ3 2026
- Same-store sales trends at KFC and Taco BellQ3 2026
- Impact of the new KFC menu in major markets2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 05 Aug 2026; since then the company filed 8-K (03 Nov 2026 · results).
The business
The Recipe for Good Growth strategy aims to make the brands loved by customers, trusted and connected through teamwork, technology and global scale 1. In 2025 the company introduced Byte by Yum!, a set of software as a service and artificial intelligence driven products for restaurant operations 1. Digital sales reached 60% of system sales in 2025 1.
Market context
The quick service restaurant industry in which YUM competes is intensely competitive, with rivals including restaurants, supermarkets, convenience stores and coffee shops, and price, food quality and service reputation are key factors 1. The company notes that delivery aggregators have expanded competition in recent years, especially in urban areas 1. YUM concepts do not represent a significant share of the retail food industry worldwide or in individual countries 1.
Demand depends on changing consumer tastes, national and regional economic conditions, disposable purchasing power and demographic trends 1. Commodity costs such as chicken, cheese, beef and pork fluctuate, and the company could pass price increases to customers, although there is no assurance this can be done in practice 1.
Trends
- Digital growth and Byte by Yum!tailwind
Digital ordering and the Byte by Yum! platform could support sales and operating efficiency, particularly if franchisees adopt common tools quickly 1. Digital sales reached 60% of system sales in 2025 1.
- KFC and Taco Bell recoverytailwind
Second-quarter 2026 results show solid growth at KFC and Taco Bell, supported by same-store sales and network expansion 3. This trend could continue if the new KFC menu meets customer expectations 3.
- Dependence on franchiseesheadwind
Growth depends on franchisees' ability to fund new openings and remodels, and if their finances weaken, network development and fee income could be reduced 1.
- Exposure to Chinamixed
Mainland China is an important market through Yum China, but political, economic and regulatory risks there can affect results, and Pizza Hut in China will be acquired by Yum China 13.
Competitive position
Competitors include international, national and regional restaurant chains as well as locally owned establishments and supermarkets selling prepared meals 1. Competition for customers, personnel, sites and franchisees is intense, and YUM brands compete with other quick service networks 1.
In pizza, competition comes from a highly fragmented market where the company believed Pizza Hut had structural advantages, yet it chose to sell the brand 13. Delivery platforms and grocery convenience meals are indirect competitors that could gain share if not managed effectively 1.
- Quick service and national restaurant chains
International, national and regional chains in the quick service segment that compete for customers, staff and sites 1.
- Supermarkets and supercenters
Grocery retailers offering prepared meals, including pizzas and entrees, that compete directly with the concepts 1.
- Food delivery platforms and aggregators
Delivery services that have grown and compete for customer orders, especially in urban areas 1.
- Coffee shops and convenience stores
Coffee shops, snack bars and convenience stores that compete for quick consumption occasions 1.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
- Here Are Wednesday’s Top Wall Street Analyst Research Calls: Airbnb, Booking Holdings, Credicorp, Dutch Bros, Expedia, Hartford Financial Services, Group, Meritage Homes, Patchex, Yum! Brands, and MoreYahoo Finance — News · 16 Sept 2026 · EN
- How Is Yum! Brands' Stock Performance Compared to Other Consumer Cyclical Stocks?Yahoo Finance — News · 10 Sept 2026 · EN
- What Does the Pizza Hut Sale Mean for Yum! Brands (YUM)?Yahoo Finance — News · 25 Aug 2026 · EN
The latest news item in our archive is from 16 Sept 2026; the newest SEC filing is from 03 Nov 2026. The press archive comes from the RSS feeds we follow and does not necessarily cover the latest event — the filings alongside do.
SEC filings
- Current report03 Nov 2026Results of operations · Financial statements and exhibits
- Current report01 Sept 2026Departure or appointment of officers · Regulation FD disclosure · Other events · Financial statements and exhibits
- Current report (amendment)28 Aug 2026Departure or appointment of officers
- Current report21 Aug 2026Departure or appointment of officers
- Current report (amendment)07 Aug 2026Departure or appointment of officers
- Current report07 Aug 2026Material agreement · Acquisition or disposition of assets · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report05 Aug 2026
- Current report30 Jul 2026Results of operations · Financial statements and exhibits
- Current report16 Jun 2026Material agreement · Other events
- Current report16 Jun 2026Regulation FD disclosure · Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Yum! Brands, Inc. · 20 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Yum! Brands, Inc. · 05 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Yum! Brands, Inc. · 30 Jul 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.