Nov 3 (Reuters) – Yum Brands reported a wider-than-expected fall in quarterly same-store sales at its Taco Bell business, after a multistate cyclosporiasis outbreak in the US during the quarter made customers wary of dining out at the Tex-Mex chain.
The company also missed overall same-store sales targets for the quarter, as fast food chains compete aggressively for budget-conscious consumers who are leaning toward cheaper home-cooked meals amid high inflation.
Taco Bell was first linked to the outbreak in early July, resulting in an around 20% drop in weekly foot traffic at its outlets at the peak of the epidemic before the chain recovered in September and October, according to data firm Placer.ai.
“Since the end of September, Taco Bell U.S. has been outpacing the quick service restaurant industry on same-store sales growth,” CEO Chris Turner said.
Shares of the company rose about 3% in premarket trading after Yum Brands, which completed the divestiture of its Pizza Hut chain in September, also beat quarterly profit estimates.
US health authorities last month declared the outbreak, which resulted in 570 hospitalizations and two deaths, was over.
Third-quarter sales at Taco Bell, which made up nearly half of the company’s operating profit in 2025, fell 4% and missed analysts’ expectations of a 0.9% drop, according to data compiled by LSEG.
Overall, same-store sales at Yum Brands were flat compared to a year earlier, and missed analysts’ estimates of a 0.9% rise. Same-store sales at KFC, the biggest Yum unit, rose 1% compared with expectations of a 2.1% rise.
On an adjusted basis, Yum’s profit fell 1.3% to $1.56, beating estimates of $1.49 per share.
Burger King parent Restaurant Brands International also topped quarterly sales expectations last week, as its strong focus on value boosted demand.
Bigger rival McDonald’s reports quarterly results on Wednesday.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shinjini Ganguli)
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