Fast-food company Yum! Brands (NYSE: YUM) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 15.2% year on year to $2.06 billion. Its non-GAAP profit of $1.50 per share was 8% above analysts’ consensus estimates.
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Yum! Brands (YUM) Q1 CY2026 Highlights:
- Revenue: $2.06 billion vs analyst estimates of $2.05 billion (15.2% year-on-year growth, 0.6% beat)
- Adjusted EPS: $1.50 vs analyst estimates of $1.39 (8% beat)
- Adjusted EBITDA: $704 million vs analyst estimates of $672 million (34.2% margin, 4.8% beat)
- Operating Margin: 31.3%, in line with the same quarter last year
- Free Cash Flow Margin: 16.6%, down from 18.6% in the same quarter last year
- Locations: 63,297 at quarter end, up from 60,886 in the same quarter last year
- Same-Store Sales rose 3% year on year, in line with the same quarter last year
- Market Capitalization: $43.21 billion
Company Overview
Spun off as an independent company from PepsiCo, Yum! Brands (NYSE: YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $8.49 billion in revenue over the past 12 months, Yum! Brands is one of the most widely recognized restaurant chains and benefits from customer loyalty, a luxury many don’t have. Its scale also gives it negotiating leverage with suppliers, enabling it to source its ingredients at a lower cost. However, its scale is a double-edged sword because it’s harder to find incremental growth when your existing restaurant banners have penetrated most of the market. To accelerate system-wide sales, Yum! Brands likely needs to optimize its pricing or lean into new chains and international expansion.
As you can see below, Yum! Brands grew its sales at a mediocre 6.2% compounded annual growth rate over the last seven years as it barely increased sales at existing, established dining locations.
This quarter, Yum! Brands reported year-on-year revenue growth of 15.2%, and its $2.06 billion of revenue exceeded Wall Street’s estimates by 0.6%.
Looking ahead, sell-side analysts expect revenue to grow 9.2% over the next 12 months, an acceleration versus the last seven years. This projection is above the sector average and indicates its newer menu offerings will fuel better top-line performance.
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Restaurant Performance
Number of Restaurants
Yum! Brands operated 63,297 locations in the latest quarter. It has opened new restaurants at a rapid clip over the last two years, averaging 3.9% annual growth, much faster than the broader restaurant sector. Additionally, one dynamic making expansion more seamless is the company’s franchise model, where franchisees are primarily responsible for opening new restaurants while Yum! Brands provides support.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Same-Store Sales
The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at restaurants open for at least a year.
Yum! Brands’s demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company’s same-store sales have grown by 1.5% per year. This performance suggests it should consider improving its foot traffic and efficiency before expanding its restaurant base.
In the latest quarter, Yum! Brands’s same-store sales rose 3% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.
Key Takeaways from Yum! Brands’s Q1 Results
We enjoyed seeing Yum! Brands beat analysts’ EPS expectations this quarter. We were also happy its same-store sales narrowly outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 1.1% to $158.20 immediately after reporting.
Yum! Brands had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
