Yum Brands earnings results were a little mixed. Outside of the U.S. market, the international operations under KFC had incredible strength. In the latest quarter, KFC’s US same-store sales fell by 5%. The drop off has recently raised alarms over the company’s fundamental business and competitive health. It’s a stark contrast to how far the chain has fallen from being the third largest chicken chain by sales to fifth. Both Raising Cane’s and Wingstop have since passed it.
In the midst of this chaos, KFC was enjoying a 10% upsurge in net sales. That means the company’s revenue shot up to $1.93 billion, driven largely by international expansion. The company highlighted that they achieved 4% same-storm sales growth overall during that quarter, with their largest market still being China. Leaders are already facing new challenges as the chasm widens between domestic struggle and international success. No wonder that Catherine Tan-Gillespie, who was named president of KFC U.S. in April, is under the gun.
As Tan-Gillespie looks to overcome the recent slump in U.S. sales, she’ll have to do so while facing an increasingly competitive landscape. In her tenure, KFC will reinvigorate its brand mojo. This team will increase the level of customer engagement to better compete and win back market share. That contributed to Yum Brands reporting a strong overall same-store sales growth of 2% for the quarter. This growth emphasizes that despite the current KFC struggle domestically, other parts of the company are probably booming.
Removing gains from refranchising and some other items, KFC earned $1.44 a share. This financial outcome underscores the necessity for strategic changes to address the sales slump in the U.S. market while capitalizing on the momentum gained abroad. The company is hell bent on regaining its spot as a top player in the chicken space. To accomplish this, it will zero in on smart, cutting-edge marketing and menu changes that reflect what American consumers crave.