LOUISVILLE, KY. — The Mexican pizza’s performance as a limited-time offer in the second quarter ended June 30 earned the item a permanent place on Taco Bell’s menu.
“Taco Bell’s most loyal fans were granted early access, increasing the average loyalty registrations 15 times during the two days of early access and fueling 10% growth in loyalty members in the quarter,” said David W. Gibbs, chief executive officer of Yum! Brands, Inc., in an Aug. 3 earnings call. “Demand for the Mexican Pizza was seven times previous levels, reaching over 20 million pizzas sold nationwide, with some stores selling out within a week, creating a sustained positive halo for the brand. Given the overwhelmingly positive reaction from our customers, we’re excited to bring back the Mexican Pizza in the fall when it will become a permanent fixture on the menu.”
Taco Bell US same-store sales surged 8% in the quarter. Systemwide Taco Bell sales rose 10% with increases of 9% in the United States and 31% internationally.
Same-store sales companywide in the quarter increased 1% after soaring 23% in the previous year’s second quarter. Net income for Louisville-based Yum! dropped 43% to $224 million, equal to 78¢ per share on the common stock, from $391 million, or $1.31 per share, in the previous year’s second quarter. Revenues increased 2% to $1.64 billion from $1.60 billion.
A shortage of delivery drivers negatively impacted Pizza Hut results.
“At Pizza Hut US, which represents 7% of our operating profit, system sales declined 3%, driven by flat unit growth and a 4% decline in same-store sales, driven in large part by continued operational challenges in our delivery business,” Mr. Gibbs said. “We made progress expanding systemwide adoption of third-party delivery as a service to help address our delivery driver capacity constraints to meet consumer demand.”
Yum! removed 53 units in Russia from the global Pizza Hut unit count. In June Yum! completed the transfer of ownership of its Pizza Hut business in Russia to a local operator who will re-brand locations to a non-Yum! concept.
Same-store sales declined 1% at KFC. Excluding results in China, where COVID-19 continues to restrict movement, KFC same-store sales increased 7%, Mr. Gibbs said.
Yum! removed 1,112 units in Russia from its global KFC unit count. Yum! is transferring ownership of its KFC Russian restaurants, operating system and master franchise rights to a local operator who will re-brand locations to a non-Yum! concept. The decision to exit the Russian business negatively impacted KFC’s year-over-year operating profit growth, excluding foreign currency, by 4 percentage points.For the six months ended June 30, Yum! had net income of $623 million, or $2.16 per share on the common stock, which was down 13% from $717 million, or $2.39 per share, in the same time of the previous year. Six-month net revenues increased 3% to $3.18 billion from $3.09 billion.