Yum! Brands, Inc. (NYSE:YUM) Q4 2022 Earnings Call Transcript

Operator: Our final question of today comes from Gregory Francfort of Guggenheim.

Gregory Francfort: I just want to ask about Pizza Hut U.S. I mean it seems like the business has picked up the last few quarters. And I’m curious if you’re seeing share gains or increased pricing. Or just — any thoughts on what’s going on there would be helpful.

David Gibbs: Yes. I’m glad you asked about Pizza Hut U.S. We’re really proud of what the team is doing and the success they had in the quarter and the momentum they’re building in the business. I know the franchisees and the team are working incredibly collaboratively. And I do believe getting share gains in the category and attracting new consumers. They’re doing that a couple of different ways. Number one, how they’re playing aggregators with the partnerships with the aggregators and how we’ve integrated into our IT systems, we’re seeing a significant lift in our transactions with aggregators. We started the year with about 5 transactions per store through aggregators. Now we’re up to close to 50 by the end of the year. That’s a massive progress and obviously, helping us access some consumers that weren’t using the brand.

But it’s also the look tone and feel of the advertising. You’ll notice that that’s changed. It’s a much more modern contemporary approach, which is connecting well with consumers. And then finally, it all comes down to the product. The launch of Melts has been very successful for the brand, attracting younger consumers to different occasions than would traditionally use Pizza Hut. So that all adds up to a very positive story for the Pizza Hut U.S. business. And thank you for the question. I think with that, we’ll wrap it up. And I think the numbers speak for themselves. It was another incredible quarter and wrapping up a great year despite many challenges. I’ll point out, we actually closed the year with over 4,500 gross new units being built.

Take the 4,100 we built last year, that’s 8,600 gross new units. That means 1 out of every 6 locations you see around the world was built in the last 2 years for our brands. I think that shows the momentum that we’ve got in the business. Our Yum China team talked about the great returns they’re getting from their new unit development last year, coupled with the top line growth that we’re seeing in existing stores, and there’s a lot to be excited about as we head into 2023. Thank you for your time today.

Operator: Ladies and gentlemen, thank you for joining today’s call. You may now disconnect your lines.