Yum! Brands (YUM) Reports Q2: Everything You Need to Know Before Earnings Announcement

Fast-food company Yum! Brands (NYSE:YUM) is set to report earnings tomorrow before market open. Here’s what you need to know.

Yum! Brands missed analysts’ revenue expectations by 6.6% in its latest quarter, posting revenue of $1.60 billion, down 2.9% year over year. It was a mixed quarter for the company, with an impressive beat on gross margin but a miss on earnings estimates.

Is Yum! Brands a buy or sell in terms of earnings? Read our full analysis here, it’s free.

Analysts are expecting Yum! Brands revenue to rise 6.9% year over year to $1.80 billion this quarter, up from 3.1% growth in the same quarter last year. Adjusted earnings are expected to come in at $1.33 per share.

Most analysts covering the company have reaffirmed their estimates over the past 30 days, suggesting they expect the company to maintain its course toward earnings. Yum! Brands has missed Wall Street revenue estimates five times over the past two years.

Looking at Yum! Brands’ competitors in the traditional fast food segment, some have already reported second-quarter results, giving us a hint of what to expect. El Pollo Loco reported flat revenue year over year, beating analyst expectations by 1.5%, while Wendy’s reported revenue growth of 1.6%, missing estimates by 1%. El Pollo Loco’s stock price was unchanged following the results, while Wendy’s saw a similar reaction.

Read our full analysis of El Pollo Loco’s results here and Wendy’s results here.

Investors in the traditional fast food space have had steady hands as they enter earnings, with stocks flat over the past month. Yum! Brands is up 5.1% in the same time frame and is on track for earnings with an average analyst price target of $144.40 (compared to the current share price of $134.50).

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