Yum! Brands (NYSE:YUM) executives emphasized momentum at Taco Bell and KFC, expanding digital engagement, and continued global unit growth during the company’s 2025 fourth-quarter earnings call, while also outlining expectations for a Pizza Hut turnaround program as a strategic review continues.
2025 performance highlights: Taco Bell and KFC lead results
CEO Chris Turner said Yum “delivered another year of outstanding results at KFC and Taco Bell,” pointing to a year of market share gains at Taco Bell and record-setting development at KFC. Turner highlighted Taco Bell’s 7% same-store sales growth in 2025 and said KFC reached a milestone with its 30,000th international restaurant. Both Taco Bell and KFC delivered 10% divisional core operating profit growth for the year, he said.
Digital growth and Byte by Yum adoption
Management repeatedly cited digital as a key driver. Turner said digital mix approached 60% in 2025, with digital sales growing 20% year-over-year, supported by mobile apps, loyalty, delivery, and kiosks. Roy provided additional details, stating that Yum’s digital sales topped $11 billion in 2025, up 25% year-over-year, lifting digital mix by 9 points to nearly 60%.
Roy also discussed progress with the company’s technology platform, Byte by Yum!, which consolidates Yum’s technology solutions into one restaurant platform. He described Byte’s rollout in “chapters,” with the first focused on building and proving the platform in the U.S. and the second focused on product excellence and accelerating adoption globally. Yum simplified Byte into two bundles:
- Smart Ops bundle (POS, menu, and kitchen management), in more than 7,000 restaurants at year-end.
- Digital Ordering bundle (web/app ordering, menu, third-party marketplace integrations), in nearly 18,000 restaurants at year-end.
Including bundles and à la carte tools, at least one Byte product was live in approximately 38,000 restaurants globally at year-end, Roy said. In 2025, Byte’s digital ordering bundle expanded to five new markets and processed more than 370 million digital transactions, representing over 60% growth year-over-year.
Roy cited operational benefits including up to a 75% reduction in aggregator ordering failure rates, up to a 10% increase in consumer satisfaction, and up to an 85% reduction in stock outs at restaurants using Smart Ops. For 2026, Yum plans to deploy Smart Ops in KFC U.K. and digital ordering in KFC Australia.
Brand updates: KFC innovation, Taco Bell consumer gains
Turner said KFC delivered strong performance in the U.K., where relevant limited-time offers and “disruptive value” drove 10% same-store sales growth in the fourth quarter and high single-digit growth for the year. He also highlighted high single-digit same-store sales growth in the Middle East in the fourth quarter, building on 13% growth in the prior-year period.
Looking ahead, management described a higher innovation cadence at KFC, including expanded marketing windows, more partnerships, and a stronger focus on beverages, sauces, and tenders. Turner noted KFC’s plan to roll out its “Quench” beverage platform to roughly 3,000 stores in 2026, and said the brand developed more than 20 sauces, leveraging learnings from Saucy by KFC. KFC also launched a global innovation hub in September intended to shorten product development cycles.
At Taco Bell, Turner said growth in 2025 was broad-based across consumer segments, with increased penetration among higher income consumers, families, and younger guests. In Q&A, the company said transaction growth outpaced the category by nearly five points and was driven by both penetration and frequency. Management said the highest penetration growth came from consumers aged 18 to 24.
For 2026, Taco Bell’s marketing calendar includes 26 new and tested innovation launches, the new Luxe Value Menu, optimized $5, $7, and $9 boxes, and continued expansion in beverages, fries, Cantina, and crispy chicken. Turner also said digital is expected to drive nearly one quarter of Taco Bell’s average unit volume growth in 2026.
Taco Bell International delivered 5% same-store sales growth in 2025, with management calling out performance in Canada, the U.K., and Spain. The company noted double-digit same-store sales growth in Canada in the fourth quarter and more than 15% system sales growth in Europe.
Development, Pizza Hut review, and 2026 outlook
Roy said Yum opened more than 1,800 new units in the fourth quarter and more than 4,550 for the year. KFC led development with over 1,100 openings in the fourth quarter and nearly 3,000 for the year across 105 markets, which Roy called a record pace for gross openings. He added that Turkey closures in the first quarter of 2025 prevented KFC from setting a net new unit record.
Taco Bell opened 228 units in the fourth quarter, its second-highest fourth quarter ever, and entered five new markets in 2025. The brand opened 155 gross international units, up almost 40% from the prior year, with development spanning 26 countries.
On Pizza Hut, management said the strategic review announced previously is progressing as planned and is intended to be completed this year. Pizza Hut global same-store sales declined 1% in the fourth quarter and for the full year, while Pizza Hut International posted 1% same-store sales growth. Pizza Hut opened over 440 gross units in the fourth quarter and nearly 1,200 gross units in 2025 across 65 countries, though those openings were partially offset by elevated fourth-quarter store closures tied to specific franchise situations.
Roy said Yum has aligned stakeholders on a U.S. program called Hut Forward, featuring a marketing program, modernization of certain technology and franchise agreements, a one-time Yum contribution to marketing support, and “targeted closures of underperforming units.” In the first half of 2026, Yum expects approximately 250 targeted Pizza Hut U.S. closures, which will result in a decline in global Pizza Hut units in the first half. Roy also said Pizza Hut first-quarter 2026 core operating profit is expected to be down about 15%, driven by the one-time Hut Forward marketing support (recorded in franchise and property expenses) and G&A growth due to integration costs tied to recently acquired stores in the U.K.
For 2026, Roy said that excluding Pizza Hut, Yum expects the rest of the portfolio to “meet or exceed every component” of its long-term growth algorithm, including delivering over 5% net new unit growth. Additional 2026 expectations shared on the call included:
- Taco Bell U.S. restaurant-level margins of 24% to 25%.
- Excluding Pizza Hut, ex-special G&A growth in the mid-single digits (including overhead related to a Taco Bell U.S. store acquisition completed in Q4).
- Amortization of reacquired franchise rights to increase by $30 million due to the Taco Bell store acquisition.
- Interest expense of $500 million to $520 million, excluding any potential debt issuances.
- Tax rate of 22% to 24%.
Roy said Yum’s net leverage ended 2025 at approximately 4x, and the company expects to hold net leverage around that level going forward, subject to market conditions.
In closing remarks, management reiterated its “Raise the Bar” priorities—winning with future consumers, improving franchisee economics to support development, and reaching Byte’s full potential—while maintaining that the company’s immediate focus includes completing the Pizza Hut strategic options review.
About Yum! Brands (NYSE:YUM)
Yum! Brands, Inc (NYSE: YUM) is a global quick-service restaurant company that develops, operates and franchises a portfolio of well-known restaurant brands. The company’s principal brands are KFC, Pizza Hut and Taco Bell, each focused on distinct product categories—KFC on fried chicken and related menu items, Pizza Hut on pizza and complementary offerings, and Taco Bell on Mexican-inspired quick-service food. Yum! is headquartered in Louisville, Kentucky and was formed as Tricon Global Restaurants in 1997 when PepsiCo spun off its restaurant businesses, later adopting the Yum! Brands name.
The company’s operating model centers on brand development, system growth and franchising; a large portion of its restaurants are operated by independent franchisees, and Yum! generates revenue through franchise royalties and fees in addition to sales from company-operated locations.
