Yum! Brands, Inc. (NYSE:YUM) Q3 2023 Earnings Call Transcript

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David Gibbs: Sure. Yes, obviously, we’re really pleased with the progress we’re making on both of those businesses. Pizza Hut US, for example, has been taking share in the category now for, I think, third consecutive clear. And that — from all the things that we’ve talked about on these calls and that you’re all seeing in the marketplace, the way that they play the aggregators versus their competition, the way they’re launching new products and new forms like Melts, which brings in a new consumer. More recently, you probably saw the announcement about late night and how we’re owning that part of the category. So, Aaron Powell and David Graves, their teams are really leaning in and they’re on their front foot with Pizza Hut.

It’s a tough category, of course, but one we’re really pleased with the progress we’re making. Similarly, KFC, you’ve seen us do things like launch nuggets and lean in more on the boneless. That’s a huge opportunity. It’s no secret that chicken is a growing category. We’ve got the world’s greatest chicken brand. We’re set up for success there as we evolve our business. And the team that we’ve got in place there, also a relatively new team, I think, is doing an amazing job of rolling out those kinds of programs that will lead to incremental sales, incremental category entry points as we talked about earlier on the call. So both businesses, I think, poised for lots of growth.

Matt Morris: Operator, we have time for one more question.

Operator: Thank you. Our final question today comes from Brian Harbour of Morgan Stanley. Please go ahead, Brian.

Brian Harbour: Yes. Thank you. Good morning. I was going to ask about Pizza Hut as well. And if you could provide any comments on kind of delivery versus carryout performance, also how — if a third party is still kind of a growing channel for you? And then I know there’s disparities by market, which is growing faster. And what explains some of them do you think that in the US I think it’s fair to say that competition is quite significant right now and will be into next year, but do you think that the US can grow on a same-store basis next year?

David Gibbs: Yes, obviously, we believe Pizza Hut can and will grow sales. In terms of delivery, one aspect of this maybe is underappreciated is the fact that we now have delivery as a service where we can outsource some of our deliveries through our aggregator partners, that actually was one of the unlocks for us to go after late night when it may have been a little bit harder for us to staff with drivers, being able to hand off those deliveries to our aggregator partners allowed us to extend our hours. I think it’s just another proof point in what a nice job the team is doing in thinking through the strategic benefits we can get from the various relationships we have in the category. But here, in a world where the consumer might be a little bit more pressure, obviously, carry out is playing a bigger role and lower price points will play a bigger role in the pizza category.

That’s one of the reasons why Melts, I think, has landed so well and will be a big part of the growth for Pizza Hut going forward. I appreciate everybody’s time today. Obviously, this is a quarter that we’re incredibly proud of, much like the last few quarters and never gets old, keep continuing to put up double-digit top line growth and strong bottom line growth. I’ll just end with a few comments about what we saw as we went through our internal annual operating plan reviews in the last few weeks. It’s something that you guys don’t get a glimpse into. But I can tell you, the spirit in the rooms that — when we met with the teams, the talent in the room that’s displayed, and the way that everybody is sort of on their front foot now, we’ve got the — all this work that we’ve done on technology over the last few years, firmly planted so that we now have something that we can leverage in a much bigger way to grow sales.

I think our franchisee partnerships have never been better. And all of that adds up to what I thought were incredibly inspiring plans going forward to take market share, grow our businesses the right way for the long term and continue to put up results like you saw this quarter. So we’re incredibly excited about the future. We look forward to talking to you on the next call about a little bit more detail about plans for 2024. Thanks, everybody, for your time today.

Operator: This concludes today’s call. Thank you for joining. You may now disconnect your lines.

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