Dallas, Texas--(Newsfile Corp. - August 26, 2026) - Yum! Brands (NYSE: YUM): Stonegate Capital Partners initiates coverage on Yum! Brands (NYSE: YUM). Yum!'s 2Q26 provides evidence that the post-Pizza Hut earnings model is becoming increasingly centered on Taco Bell's U.S. growth and KFC's international development runway. Ex-Pizza Hut, system sales increased 7%, units 6%, same-store sales 4%, and Core Operating Profit 8%. The July food safety issue creates a near-term Taco Bell interruption, but we view the impact as temporary. Sales trends have improved from the July 18 low, online sentiment has returned to pre-issue levels, and brand-love measures remain intact. The quarter also reinforces the broader operating model, with stronger restaurant-level performance supporting franchisee returns, faster unit development, and growth in Yum!'s recurring royalty base.

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Key Takeaways:

• Ex-Pizza Hut results highlight the earnings profile of the remaining portfolio, with Ex-Pizza Hut 2Q26 system sales increasing 7%, units 6%, same-store sales 4%, and Core Operating Profit 8%. Taco Bell remains the primary U.S. growth engine, while the July food-safety issue creates a near-term interruption that management currently expects to pressure 3Q sales and margins.
• KFC provides the largest long-term development opportunity, supported by attractive franchisee economics and significant international whitespace. The division opened 660 gross restaurants across 55 markets in 2Q26, grew units 7%, and continues to target higher AUVs and same-store sales alongside an estimated 20,000-unit whitespace opportunity.
• The Pizza Hut divestiture should leave YUM increasingly concentrated around its higher-growth, predominantly franchised KFC and Taco Bell businesses while providing approximately $2.3B of expected aggregate net proceeds. We expect revolver repayment and substantial share repurchases to complement continued unit development and royalty growth across the remaining portfolio.

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About Stonegate
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.

Source: Stonegate, Inc.

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