Yum! Brands Inc.’s Pizza Hut chain weighed on results in the latest quarter, sending the shares down in early U.S. trading.

-Global same-stores sales, a key measure for retailers, rose two per cent, while analysts anticipated 2.1 per cent, according to Consensus Metrix. That measure dropped 2 per cent at Pizza Hut, more than estimated. Taco Bell and KFC both rose, roughly in line with projections. For more details, see here.

Key Insights

-The drop in Pizza Hut’s sales is a sign that its lagging turnaround continues. The chain is facing more U.S. delivery competition from chains quickly adding the service such as Chipotle Mexican Grill Inc. and even Starbucks Corp.

-Taco Bell had a solid performance. In addition to capitalizing on delivery and digital options including self-order kiosks, the brand had success with some new menu items and through discounting. That’s helping Taco Bell attract customers in the highly competitive environment of fast-food chains.

-Yum China Holdings Inc., a separate company that operates in China, earlier reported a disappointing quarter, and said the coronavirus will materially affect its sales this year. Yum China has shut down most KFC and Pizza Hut stores in Hubei Province, the center of the deadly outbreak.

Market Reaction

-Yum shares fell 1.7 per cent to US$105 in early trading in New York Thursday. Through Wednesday’s close, they had gained 13 per cent in the past 12 months, while the S&P 500 Index jumped 22 per cent.