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YUM! Brands' (YUM) Gears up For Q1 Earnings: What's in Store?

Yum! Brands, Inc. YUM is scheduled to report first-quarter 2021 results on Apr 28, before the opening bell. In the last reported quarter, the company delivered earnings surprise of 16.2%.

How Are Estimates Trending?

The Zacks Consensus Estimate for first-quarter earnings per share is pegged at 85 cents, which indicates growth of 32.8% from 64 cents registered in the year-ago quarter. For revenues, the consensus mark is pegged at nearly $1,461 million that suggests an increase of 15.7% from the prior-year quarter’s figure.

Let’s discuss the factors that are likely to get reflected in the quarter to be reported.

Yum Brands, Inc. Price and EPS Surprise

Yum Brands, Inc. price-eps-surprise | Yum Brands, Inc. Quote

Factors at Play

Yum! Brands’ first-quarter 2021 results are likely to have benefitted from its focus on off-premise channels and strategic investments in digital technology. Notably, the roll out of new e-commerce platform (in the KFC segment) along with the omnichannel menu management system (in the Pizza Hut segment) is likely to have contributed to first quarter top-line.

The company’s focus on unit expansion efforts is encouraging. During the last quarter earnings call, the company stated that it expects to open 276 Habit restaurants in first-quarter 2021. This along with focus on pop-up drive-thrus and curbside pickup strategies are likely to have boosted revenues in the first quarter. Notably, improved accuracy, speed and reliability on the back of aforementioned initiatives bode well.

Meanwhile, the Zacks Consensus Estimate for revenues at Pizza Hut and Taco Bell segments is pegged at $247 million and $490 million, suggesting year-over-year growth of 5.1% and 8.2%, respectively. Moreover, the consensus mark for revenues at KFC is at $617 million that indicates growth of 9% from the year-ago quarter’s levels.

What Our Model Says

Our proven model predicts an earnings beat for YUM! Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: YUM! Brands has an Earnings ESP of +3.67%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat Earnings Estimates

Here are other stocks from the Zacks Retail-Wholesale space that investors may consider as our model shows that these also have the right combination of elements to post an earnings beat this quarter:

Starbucks Corporation SBUX currently carries a Zacks Rank #3 and has an Earnings ESP of +7.42%.

Brinker International, Inc. EAT carries a Zacks Rank #3 and has an Earnings ESP of +8.37%.

Domino's Pizza, Inc. DPZ carries a Zacks Rank #3 and has an Earnings ESP of +2.75%.

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