Taco Bell does well but it is difficult for KFC because of China lockdowns.

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Yum Brands reported mixed second quarter results as KFC and Pizza Hut decreased their same-store sales.

The only company chain to report same-store sales growth was Taco Bell.

Yum said it is also in the “advanced stages” of selling off its KFC business in Russia

As a result of Covid lockdowns in China, Yum Brands reported mixed quarterly results on Wednesday.

The company’s reported strength was based on higher prices that fueled increased same-store sales. Taco Bell has less of an international presence than its sister chains.

Based on a survey of analysts by Refinitiv, here is what the company reported versus what Wall Street was expecting:

Earnings per share: $1.05 adjusted vs. $1.09 expected
Revenue: $1.64 billion, in line with expectations

$1.64 billion in net sales was an increase of 2% from a year ago. While same-store sales in China dragged down its overall global same-store sales by 1%, same-store sales in China rose by 6%.

The fried chicken chain’s same-store sales declined 1% globally, with China accounting for more than a quarter of its sales. In the United States, its second-largest market, same-store sales fell 7%. Speaking on a conference call, Yum executives said the chain faced tough comparisons with the year-ago period when it released a revamped chicken sandwich.

Pizza Hut also experienced declining sales in the U.S. and China. The chain’s global same-store sales declined 3% as U.S. sales softened and Chinese sales fell 14 percent, excluding foreign currency fluctuations.

According to Yum, consumers globally are becoming more cautious, which is forcing the company to offer more value.

If you look at the U.S. over the last quarter, what you’ve seen is the low-income consumer pull back more pronounced, Yum CEO David Gibbs told CNBC.

Still, he added that to say that those with higher incomes are handling inflation better than those with lower incomes is probably a bit of an oversimplification. This is a difficult economic environment that is being clouded by the rise in wages, the stimulus checks from last year, the war in Ukraine, and the pandemic.

Global same-store sales growth was only reported by Taco Bell. Prices hikes boosted same-store sales at its restaurants by 8%. Traffic to the restaurant hasn’t slowed in spite of the menu’s increase in price, showing that customers haven’t been driven away just yet.

Also helping the chain was a Mexican Pizza promotion that sold out much earlier than expected. In September, the menu item will be permanently added to the chain’s menu. Despite price hikes, Taco Bell’s margins stayed the same from a year ago, proving it had successfully mitigated inflation.

Yum reported a net income of $224 million, or 77 cents per share, down from $391 million, or $1.29 per share, a year earlier.

No long-term implications taken into account, the restaurant company generated earnings of $1.05 per share in the second quarter.

Yum said Wednesday it is in the final stages of selling its KFC business in Russia. When all is said and done, In 2021, Yum will have exited the Russian market entirely. The market accounted for 2% of Yum’s systemwide sales.

Total restaurant count fell by 702 during the quarter and there were a 1,165 restaurants in Russia it got rid of while opening 463 new ones.

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