Yum! Brands (YUM) 2 Nov 222022 Q3 Earnings call transcript

Hello, everybody, and welcome to today's Yum! Brands, Inc. 2022 Third Quarter Earnings Call. My name is Drew, and I'll be coordinating your call today. [Operator Instructions] I'm now going to hand over to Gavin Felder, Chief Strategy Officer and Interim Head of Investor Relations to begin. Please go ahead.

operator. Thanks, and joining everyone, you thank morning, us. for Good

CEO; be Jodi maternity Dave Dyer a Gibbs, On reminder, Controller. she Russell, from will I our David President are on As our while Senior CFO; and covering is call today Turner, Vice Chris our our Corporate and leave. out

Following remarks we'll Chris, call the from open David and to questions.

forward-looking the our filings forward-looking that future SEC. and with started, announcement would results materially statements that cause call includes factors release only you events are actual in cautionary like with the this the to made risk subject uncertainties remind as our earnings Before date of conjunction statements to in I considered to be are of we from could All and this get in statements our these and the should that conference differ included statements.

today's definitions with and used our In to find addition, sections of measures. during impact reconciliations relevant please that foreign of and non-GAAP the note system results non-GAAP refer call, and to the may growth as call be currency. full SEC profit Please growth releases metrics today's well sales that earnings of financial filings our of financial exclude disclosures and other measures on operating as

update Next, treatment related financial an the I'll to provide Russia. reporting on our exit from

negatively performance two system This percentage second elected by to we and metrics. our of our remove unit quarter, reminder, business by a sales the As Russia from of three points the key beginning as third points. percentage the growth growth impacted quarter

third thus results do from our removed sales sales quarter. not the same-store impact units and calculations for these were Additionally, same-store

unit prior sales for call, to base. system growth the quarter our from adjusted Russia purposes all are year of growth this For remove to results the business the references and

the to business. transfer and expenses continue measures of include KFC, of to incurred relating the to Russia expenses including royalty in and Russia the ownership support for We revenue GAAP business

a have subsequent exit and to profits other item expense Russia our we the operating of As the as and unallocated segments conflict special corporate result a to of operating business, and net income the reclassed the within line. start our reflected decision from to

our Financial section market, for information of each our reporting Reports calendar visit the on website. please more For

are live investor our pertaining is recording. We ask restricted call provided this being future conference playback. be be be XX-Q structure would Form This like Yum! to make advised and and following. via conference use that call available any our in broadcasting will upcoming debt a to also will and the website. Disclosures in about outstanding question, Please aware our you of the time included if of it will events We our recorded at be of you filing. capital group for

XXXX Investor Day also hosting XX, will released December be via We day. call person an the will on webcast investors.yum.com. be the the conference at New Exchange. quarter XXXX, be on in earnings at York Fourth Stock with will same X, February on website Tuesday, event The our

Gibbs. David like I'd the to to over turn Now call

Gavin, morning, and good you, Thank everyone.

iconic line unit X% sales for Our top growth X% by brands. demand growth. strong quarter momentum underpinned same-store and XX% clear highlights growth delivered sales our system this We

growth have by margins. value thrilled performers from world. I'm comps this the pace quarter. technology marketing consumers consumer particularly around to leading approach, and restaurant-level gross new about broader driving brands top did with and needs and through job improvement platforms to of both act generate development moments powerful countries, exceptional being evolves, us as The such excellent to to standout confidence a the the proof to is KFC KFC transaction and were insights, performance growth in the omnichannel the in division translate to for units delivering is resulting convenience. its culture and winning, standout opened the line Taco amplify of by prior meet an a that the our Taco allow of ability continue I'm across Bell and made into consumers that While its environment Bell thrive analytics, we creating macro thanks in quarter. share also in XX total and areas distinctive, our excitement XXX impressive that and engine excited we diversified. to sequential investments

committed As and are of invest the these the in term. well-capitalized brands franchise our seeing growth opportunities long partners results our show, to for

Russian to on want an update business. Next, provide our I

we Russian purchase mentioned, agreement rights of Gavin KFC to franchisee. Russia ownership transfer operating to system signed existing and master franchise have As our a restaurants, KFC an

transaction, of corporate extremely that difficult will time presence our completion and region. I in say want in proud our this of ceased have Russia. the the how the teams Following we people incredibly I'm have managed local our the safety of to through prioritized

the our at of is every we and will they priority center always one number Our people, make. be decision

about bold unmatched talk our our and quarter for two short, talent. results Recipe capabilities or Chris share our will Good. drivers. culture our growth provide for details Distinctive unrivaled Relevant, on I'll Now financial Then Easy restaurant of our growth the and and discussing before development of I'll third RED drivers; operating and Brands, our an update

sales same-store for RED XX% which accounts brands. cost. our with and underpinned Beginning XX%, growth First, growth. sales unit I'll System KFC X% operating by our division, grew discuss of the X%

which certain operating prove can a quarter. sales local and a that system of same-store X% across the and multitude perform driven sales. an saw grew International pressures. even these of our At well XX% sales as XX%, portfolio in experience Middle this tightened macro environments, profit, and same-store in This focus As second by business on pockets acceleration our digital East, of represents operations in the We business, results represents value. KFC's growth strength our from the increase Africa, the momentum in to notable significant thanks X% a channels India

impressive truly on market Middle system grew a Our Collect. channels, with across strength ramp-up & all an kiosks and including of the sales use East is in where XX% fire, Click

customers same-store famous quarter rolling on At this underpinned the all-in-one out done XX%. & a much back Express as sales, drive where product the grow Mac quarter. well They've we team bowls with like of as Our offers X% $X guarantee. and saw job comp. brought an for a kiosks during experience The KFC Collect value-oriented to is lost digital grew XX% X-minute providing Africa, focused enjoying this drive helps talent India rebranding the across easy market outstanding market item an sales by as our reboot fees. system channel, In consumers. Click Cheese system convenience-driven The the convenient sharing sales sales US, takeaway their positive &

two-piece a launched driven results for which limited in Additionally, we drum positive and a meaningful sequential a has time, thigh, transactions. improvement $X, in

strong the easy represents X%, BB grew the evident Taco the premium adding was is venue a truly Burrito, Bell demograph. the Bell X% unit the and saw same-store have every X% is This for of to a US, offers which At products X% profit. one-of-a-kind Taco current broad innovating sales a unit to bringing innovation extremely quarter, with like growth across sales way the brand life creative X% by for cheese brand undermined growth. $X economic Moving consumers stand is can. you on growing that Taco distinctive operating to our enough value in with led ability range Bell menu, to by sales growth. to relevant, grilled with such XX% our We its to team while momentum unique creating is with through most X% Bell burrito. Taco Cheesy system environment, only system with a as division, appeal The growth same-store and sales and

net in International, we five Mexican markets double-digit excited with grew driven sales marking the we've mid-September. helping same-store size relaunch optimize system and another In local about fourth franchisees last third We're more quarter, Bell development XX% we're quarter, sales sourcing delivered X% the growth efficiencies. As new momentum sales which Taco number in in journey. Year-to-date, driving pizza, point marketing At at key double leverage expand almost capabilities their opened Taco expansion units, year. in Bell to the unit gain XX%, international and markets, the the growth, Bell's growth. enter system the scale by spend, of this opened even Taco US occurred XXX our milestone

growth. of to at At to which Hut more and unit X% system our by are expand a focused sales same-store profit, X%, we X% Pizza reach sales underpinned Pizza division, growth. XX% our sales our everyday International, brand. X% our led and Next, operating X%, become Across on profit, finding operating ways the grew markets, which of Hut our growth grew system X% accounts same-store X% growth for accounts unit for by sales

recovery offering, giving More broadly, fun the Hut US, launched is to operating a traffic $X. Pizza value our we our emerging this traffic India the growth Box key customers COVID. and they I'm value are wherever a flavor as impact example, platform to For our be My say profit, Pizza team brands Hut leading roughly pizza proving seeing everyday costing as a growth. X% X% driver to now a demand, over which same-store are. through for pleased lap the is and innovation countries. helps [indiscernible] been for live customize access markets new XX with sales and in that focus business The system the lean in to driven individual on also X%, option sales saw the key the our of us sides. customers entrees to of by provide ability with platform and accounts and meal in A has

at integrate our this third-party XX% As to one-third into with system and with systems partner party our we continue initiative, them part POS of using of aggregators marketplace. least

In we to franchisee introduction led value $X.XX and Pairs the family the of of demand have the effort right working medium Big return meet such ensure one to as to are value profitability. offerings deal offering. the and consumer addition, as topic an Dinner abundant Box the This items we maintain

on have Habit second the three-year sales Burger improved as same-store a Grill, Lastly, sequentially the since basis trends quarter.

to consumers good mobile downloads leading sales app, see in last now growing the since to progress, continue for we relationship account of Habit channels customers. new Digital The forming is Additionally, increase our quarter. our app team direct at XX% and making with mix. a sales XX% download

talent Moving front. and driver on growth to unrivaled our culture

celebrating our XXth company publicly-traded world-class been have and we played unique calls, various I'd year. XX our previous in years. the on the important anniversary people-first mentioned over this to in acknowledge a as forms talent like success have we've throughout culture last our As role

outstanding Our collaboration, developing growing others, key recognition their recruitment of has bench success is of commitment healthy differentiator brands. and teams. and people is leaders I'm proud our for portfolio of performance of continued the retention on It deep increase from who strong new and brand. drive opportunities driven of our careers continues and promotions and a within growing are iconic and culture, how to our focused a our Yum!'s our leaders to which across amazing ensuring in

with good. continues leadership team as will to global markets talent comes Operating Mars to of from a an for in two our us industry. culture When Pizza its well. Shannon it evolve public add talent value and Allyson culture as a strategy, recipe Officer, Park, our attract of with and within works as overseeing digital-first that brand's enables as Global Yum!'s importance operate Starbucks our as area Garcia role Affairs mindset. incredible executives just examples former outside These Inc. jet. we work welcomed ESG I'm which focused for and our attract and to we increased and that's that brand way the on Executive, Our Chief the Officer, critical are priority execution our well Hut, and areas communications we're top commitment making former we welcomed food progress to planet. Recipe the Corporate three our of our policy of We ESG driving as of our continue invest our the continue Good, on people, to in At Transformation the external to recently proud Chief the

brands prove and moved our on exciting in Hut well provide electricity. renewable project we at announced it We're and US And renewable as resilience help when To restaurants example, to farm-level to wrap impact offices clear was business and energy as significant The this to with a America all markets quarter. global areas we are our make study August, am diversified farmers I momentum partners gas in to a I'm brands our well on excited with over than comes we efforts, future to solutions believe conducting operating that franchise the of any sustainability we technology in unmatched more we're company-owned the scale, Chris, up, emissions. to continue a US Yum!'s power in innovative perform our you. and Dairy our position business. we ever worldwide. restaurants as in confident the to in reduce now identify to unique climate our scale, For of prioritized. iconic of Pizza an the Farmers success demonstrated world-class greenhouse of environment. With that global needed participating can an data unmatched With the partnership With truly low-carbon about capabilities, I that,

X%, David, growth headwind year. I'll followed administrative Today, units results, I'll were at and Impressively, Bell across discuss with portfolio. FX broad-based Ex-special tracking margins last our level which unmatched operating removal and line third $XX a development million. year includes trending of above in of and fiscal everyone. had our and XX% now X%. profit, strength expenses with reported expectations general for FX full levels. impact X-point billion our strategy. for with Taco begin quarter a to grew of $X.X Same-store headwind came expect bold expense X%, XXXX. you, and grew $XXX while financial G&A capital capability third pre-COVID Russia this year grew our profit With $XXX sales million, good XX%, financial Thank store morning, respect sales our approximately from above in restaurant we a operating million System evident results. profits our the grew operating quarter drivers, Core by our negative

quarter excluding items the versus special $X.XX, XX% Third decrease EPS, was year. an prior

growth percentage points rate impact percentage to by gains tax unrealized impacted higher year-over-year associated percentage In foregone investment also from a in six EPS owing our three addition to percentage nine from points from FX, Russia, negatively point was nine profits the operating points with in and a lower aforementioned Devyani.

quarter just largely the rate this in Our was higher adjustments at due next than year prior usual recorded with associated special tax to under XX%, quarter taxes.

full rate global strength expect profit to our continue grow operating Given to now given expect we and range year these single-digit of XX% to same the Overall, our between the adjustments, business, tax XX%. full for core we the in year. mid land

profit we year, in our As on mentioned Russian calls, for be expect outlook. core the growth single-digits whereas two to growth we past of would quarterly high with profits, long-term not the this operating loss line

on Now let growth unit growth detail me share restaurant our some development and bold more driver.

XXX new opened portfolio. This we our quarter, brand we XXX across Thailand gross with opened Middle units with encouraging KFC, the charts. China, the momentum new leading and units gross India, At East

International XX at This opening setting saw puts year-to-date quarter, third gross Our a gross led time by over units, development Hut units gross incredible Hut opened division record this Pizza quarter, international which The led year. Hut record. units, achieving progress new units. Bell with gross openings units QX a this Turkey each new Pizza gross development, China, new of Pizza more development strong and of XXX adding XXX quarter development XX new is units. India than Taco International's XX ahead XXX last market division this

For Taco XXX I'm both the joined that that share of India Bell now to this countries UK and the exceed Spain excited International, in quarter, units. ranks markets

this growth macro development development Bell's use our development franchisees US as international While grow. we strong robust, Taco our unit markets, year. to market lead opportunities Taco to across pressures disruptions uneven the our expect Bell as remains Despite remains

chain costs. We in partnering closely navigate and the with challenges construction to higher our supply are franchisees

pricing realize scale on are equipment and key items. our secure to both leveraging We favorable sourcing and expertise

for offering and highly are focused for our profitability teams long-term value balancing on customers. our Our franchisees

scale we With franchise of grow and our environment. system at have in unique to well-capitalized committed confident ability and global the the we our power Yum!, remain in economic any

easy update our fastest discuss three and the focuses operations through Taco the experiences, I'll for top with customer easy experiences and our Bell X drive-thru strategy, which KFC technology start delivering pillar, in insights. US. capabilities on operational Next, and dedicated easy exceptional an the digital pillars Magazine QSR our in ranked I'll operating easy unmatched on times programs. and of experiences

times In considering quarter and faster sales this impressive KFC restaurants mix, sales in Bell stood division system Taco XX% year-over-year have X also that drive-thru only with increase were result kiosks. seconds out year-over-year. a more fact, sales an X% than XX% KFC of kiosk currently

app are saw with a front recently in launch. is chat international We countries. in platform backend that and We also e-commerce mobile post rates engine its website conversion with KFC live encouraged some and TikTuk the our an TikTuk's went Mexico beyond of with is expanding serving e-commerce ordering that engine and increase smaller

e-commerce countries TikTuk's in by expect year-end. XX engine will be We live

Moving for adoption access third-party also that the time and of our valuable completed delivery into franchise customers ensure Hut customer to aggregators system the centers peak on pillar, save can on this Pizza meet experience. during delivery We a team with who and team as expectations our to spend then can the service our elevating helped our options member building brands. with Further easy members we aggregators for integration to hours time experience. on provide initiative more of more our has third-party partner customer the delivery second aggregator partner our operations and US that quarter,

of rollout management an at Smart driver tracking system rate. Dragontail's continues Additionally, the global impressive progress kitchen and to

our the to company, world. the roll continues allow our Quantum, pillar, last data cover to of analytics year easy to power to out decisions. the leverages smarter analytics which I'll teams Lastly, marketing insights around make markets and acquired we

Pizza XX% in of return than spend a advanced are brand-country media Australia mix our covering analytics platform. media across system optimization Quantum's Quantum's leveraging deploying on platform media now XX increase seen after Notably, sales. has more Hut combinations, We double-digit nearly

using are in customer analytics, as expanded teams intelligence. optimization and pricing of suite brand also Our areas tools market Quantum's such

update provide balance on I'll Next, our an and position. liquidity sheet

at exclusion ratio we our done the the work three to the of proud of to our markets Russia business. of adjust are our over higher has the and having position significant capital approximately despite XX% leverage of net the us fixed. team debt maturities continue Xx, rates, years quarter next interest no treasury the Our ended in enviable Though put

cash returning business, before, dividend said capital in pay remain we've consistent: repurchases. remaining invest the the excess healthy As balance and via a shareholders a our share sheet, priorities competitive maintain to

of for were expenditures refranchising quarter, $XX capital Our the million. proceeds net

expectation capital totaling proceeds shares in net now gross we at $XXX share price in quarter the in an X refranchising regard per full approximately for approximately repurchased million CapEx. million, X.X year is share, expenditures Our With roughly $XXX million. $X buyback reflecting $XXX million program, million share our $XXX of and to average

growth upon September, during exhaustion new of XXXX, excited about billion will take Board our of approved saw June repurchase I'm quarter current close, continued To Additionally, the authorization. our development authorization the a positioned economic to This that of navigate we the once the share effect iconic across up world-class Directors and to XX, shows $X well brands again environment. through the are partners franchise diversified this portfolio. any and in that momentum

Stock Before wrapping Session to everyone are ready at any XX. you questions. take in Question-and-Answer place to Day our operator, taking we person forward New We up, Investor to seeing look then. York remind that is I'd like on With that, December Exchange the

Thank you.

Dennis today's from session. Geiger We will Q&A comes today UBS. Instructions] [Operator question Our start from now first

is now open. line Your

brands business the the across you're resiliency what I about Thanks Thank Great. brands the a little Chris, seeing you're a US What And how the US that or standpoint? to thinking forward. you. you're the the bit ask more how talk from wanted behavior guess in the US? really, of you going question. about could strength I the in seeing about maybe for David and consumer guides in

reported Yes. They're pleased consumer We're this obviously, very we standpoint, the From saw you line with a very top results them. strong. quarter.

of not a We're more in if on having Then, we're And little consumer any been a going concerns seeing world, bit US, recovery. there's into a bit little standpoint. well that. documented what's the little K-shaped around bit it's from a the well deliver profit. is higher our you generally the deeper well of our consumers But seeing businesses based that Taco on we're in a dig XX% succeed are So, so of positioned is and brands. environment. our to with appealing up any Those globally and great make positioned incredibly thing in Bell business US And two our KFC value particular, to brands to XX% They're in consumers business International. about demand.

the and Mac Bell, then Grill Cheese but demand KFC US, a why of at K-shaped do that normal, price a there's So demand in the end. on for high the end, value Taco like Cheese bowls go you're premium And part us moves value. needle. a is That's is great Bell. in bit big more for higher and Double point than at low the back a still our on Taco value in little recovery, of Burrito The this to QX, K-shaped Stay seeing success things the success some with which

So, value a not core to consumer, the but $X. that's that thing, price point Cravings offering, line Bell, a menu discounting burrito we're still product, offering [indiscernible]. interesting same in appealing are just for consumers at Taco something where but our that's

environment us for to brands, good. consumer which our navigate, and for As the suited it and our industry particularly as far looks well are

that like your options. that's today. in determined parts a of attractive to because not that in grocery, and if years versus your inflation. stack our which know is a pulled a don't not up other we're know years ago, issue bought same your two you couple We that you going experiencing probably And option Now, influencing some how is decision today bought your they're I in retail, really of have today. decision demand forward of We furniture the industry we other by if demand versus more lot you industries lunch ago, have

us. good a is for So environment this

Stanley. Please Our next John question Morgan from from go ahead. today Glass comes

that unit guess us X% I growth durability large for and remind the out you as and with of growth, numbers the catches just Chris I'm think horizon? is targets rate growth base one, thinking you time Ultimately, new sort the Good think what's of about system. a effect large when such about David, up of X%? morning. rate,

a just cost can to do you you So target, as of about has also over a cost that is Is three-year rate talk it worrisome capital, of sort Chris, the environment of the How Thanks. term growth changes? five-year? And frame gone up. that impediment internally? immediate debt

take Thanks, the and catching first the continue let issues anything think John. of to capital don't then large part If that the we law numbers. I'll to Chris close impressive out on of talk development of up numbers. put about some ours, I Look, that we're up and there.

You numbers which we what saw at and with year-to-date us year are quarter was record a and this had -- roughly for time, this last in numbers today our -- the showing this in line occurring believe, China countries we it that's climb outside to amount is and continues of XX of The industry, broad-based. last development, nearly quarter. development showing and XX% our that's the the of strength for now,

all the that best want. broad-based. foundational you are So have franchisees being call on for opportunity think is US. last three-year and And that out China, about XXX great two-year night are talked this in paybacks getting the the franchise voted of think the world tons the their reasons earnings Yum! Bell, Pizza KFC Hut we payback. around the strong. ranked opportunities I then Taco would of are our The We returns

of returns, to So with continue going development. we're those kind

in we pipeline about all feel the it good into and visibility have We the environment. the despite challenges

and that As with development, the pleased in far even pace of we have Russia. that we the had as in we're the the face development of strength losing

Yum!'s know forward. is few it the growth a a and for development big it's comments just to I'll the turn good, capital going over Chris, So part we equation of story challenges. on

Yeah.

just on side, David's the it John, comments buckets. and franchisees unit I'll on take One, two around development. capital up following in So

on systems sophisticated, in in that larger, the significantly to These market of through there the look franchisees in able that as additional are our near-term strong types mind investments had marketplace to well-capitalized to relates actually even are accelerate other or their it our David of and around thoughts very make. more growth. globe, higher still we growth-minded. and our And than noise interest these many of highly take Just to franchisees to interest moves rates. keep returns disruptions for more markets with many mentioned They're capital. advantage attractive small a couple in are of average compared the more in rates

very with of And we business. base the franchisee development so team partnership the we're state our our and our have pleased plus franchisees, in with strongest the

good. through So with but navigate to that, we're them working we feel

of terms capital, balance sheet, In strong resilient. of cost for balance our very our and Yum! remained sheet at

this we we few as rate think higher we that that environment. proved We're now our I of cash proud the last return shareholders. the in set to navigated years. And we're interest up well right

times through of that the fixed. created capital over the earlier, we no is our our capacity in more maturities, we of we're last cost optimizes now, leverage. few with wedded XX% have debt shareholders. be lower mentioned what at We're the do could five We strategy areas returns We've to review five if But not XXXX. we're needed. forward, going as structure to Board. years, of We also, clear, our times our going access to regularly for Right some leverage.

the our returns at what grow it for shareholders. we'll factors, know, the a or we we'll that whether make when to we'll look decision and on rates issue at set optimizes we're lower a consider when slightly look where ratio. would issuing are next time, into of other But that at just leverage a comes debt, to time do So time, going

ahead. Our go next JPMorgan. is John question from Ivankoe Please from

have question, same-store particularly capital Also new development capital underlying sure just lot a on does I'm system the doing unit on if I Hi. any see are system support it maybe perspective, the franchise the But that the value sense? heard International of some the assets that world the that And happening the world. about? should. major base you. world really maybe old. base co-invest there's XX-plus make longer-term as around around all a sales value could that existing how a mean a in but is is its that some be. big assets there Clearly, as the where there you lot focus system is projects Thanks. of countries should may. very years shareholder be question drive does something Thank with the I Obviously, to overall KFC Would US, we And base are well. just from franchise sense major might existing putting the especially well? of Yum! brand around of the world, Obviously, assets, make in could and for of haven't be countries around capital we existing it

good our make Yes, as discussed, existing the tremendous base grower, we a just relevant provides on -- also experience base. remains fresh customers. unit asset but want and we our sure to asset question a for We're a great that current

have got course, units. our the being remodeling base franchisees a Every the we system. requirements that you're new whenever with to are Of growing Plus chunk asset around at where programs stores keeping X% fresh. year, they of new added that's and

our to make to their the are that in that, base They refreshed, in working with to part it's continue asset got time hard In our franchisees know approach do terms stores. lies responsibility being business, for over with and of investing that. our the And they've franchisees. the of brands to investments keep to

Jon from from comes [ph]. question next Tower Yum! Our

now Your line open. is

Jon. the one Hey, next, quick question. of due some so. a we of in COVID Just this times heard the your to is to picture of over market. We what months kind during larger say, that or need global going? is franchisee about Europe The is pressures from relief competitors to their heard the of offer inflationary potentially it in partners reminiscent How XX

curious exposure learn in from that operating ahead? for could your I'm frame market the So you're region, to well. to even hearing if what be would profit frankly, what your as doing to and price they're you volatility potential operators maybe own that helpful And that

Yes.

the in market an challenges, growth facing, on obviously, energy in run. now, us franchisees. some right long are there So inflation, Europe is Europe, our particularly important they're for

but geography, of strong our meaningful a context have perspective the sales there. percentage be is profit. about from portfolio. our in as continues exposure We line business global our operating Europe a The top mid-teens and moderate to of

If QX. growth look XX% at sales KFC you had system in Europe, we

a that of where pronounced, was throughout a bit inflation you've those UK story a energy bit the and got continuing more is Now different overlaps year. little the holiday

for So the Hut with them Pizza parts, know we working be bit franchisee-by-franchisee business, manage is we business but basis. to this UK more We in a impacted, navigate. are Same a other closely And our on in sales negative a had slight thing the challenge we going to franchisees. there. strong

challenges. in our them So teams Europe business are inflationary those navigate with the for the plans setting help partnering to commercial

from is Please next Our Tarantino Baird. from David ahead. question go

for Hi good Hut, KFC both about you China. the morning. sales saw strength My and question Pizza out factor you really is especially when

pre-COVID You saw a pretty to material comps acceleration relative the in levels.

think just the about drove guess, sustainable talk on how basis, if comp what I and might Thanks. trend second step that you I you could a from three-year So big And that quarter be? pretty wonder up a step-up.

technology guess a speech, it in to the And both business of David. this of I had that the But in good already things. course, outside we're will we quarter and comment is US, emerging I our in Yes. while future progress are I'll beyond that, Like things foundational Thanks, that just quarters. couple continue and digital. making and drive the highlight markets. what on growth developed mentioned I would that on the driving

really markets strongly. in emerging We starting ex-China. emerging perform to outside Our XX markets are US plus the were

big a this We really expected outside we plus encouraging XXXX. about growth. thing that's XX% was and So COVID, talked markets these previous was calls versus actually recover about that that expected. is that The on as from driver that

not has has done the challenge. Bowl just solve Taco delivery think Bell So but we've embracing that has to on job high – made progress a did talked Mac versus of Cheese value KFC, performer, baseline real with Hut, some recovery about previous and growth a XXXX & quarters, but US, steady obviously, then as quarter. aggregators a third-party been the this on better in I Pizza in the

we So, delivery in trends their on sales. improvement a meaningful saw

up So growth good around as world. the you that strong mentioned, all to added

Charles Please from go is ahead. from question Cowen. next Our Andrew

robust you value at expect the and all further buy on we to Great. challenged Across you intensive the backdrop traffic domestic to value or industry And do obviously Do quick service is US look high the curious just backdrop? going across focused three and industries a by into the you labor are value COGS to XXXX. difficult you early evolving see think and the activity be portfolio, end the XXXX as I'm leading guys brands. of how

more very business well is in so over Taco the give to to thrive ability, I majority Look, that that this so can the we successful any that any the good the to overall convenience, an incredibly of seem be thing a fact more appealing to the confident is as just on predict The been of years, International bit there. all And as little normal brands forward. the where than more will without continue Value And lowest factor years my equation, demonstrated rather industry long the hard is a our that value, which of the at premium purchasing environment. of in it at that exaggerated KFC strong one for are still brands, industry, that I this be US emphasis food ago. the an the at have emphasis is able and might vast the to few a to and as that consumers navigating as last months be it's the that though, on than mentioned I over comments, Yes. feel for does environment. earlier are our last it move scale to predict or today is environment. and can nine anything of few return navigate six we We've positioned But have, that's in the of our Bell credibility we experience, products absolute appeal great there price the is confidence aren't piece, us our value.

time more one Operator, for we question. have

Our last Evercore. Palmer from go will Please be today David question from ahead.

unit the What played that, you have plan? have what about go from Pizza opens the out how Question to your into Hut that I'm growth you're thing, and I'm contribution did International highlighted into franchisees? net with driver a to versus to Hut your being Thanks. it to related a marketplaces about 'XX? having then Pizza Thank wondering And and opening concerns US as going the you quarter, service, growth the wondering, we been regard And but a strong learnings feeling as drivers delivery also, but third-party you. on it unit open stabilizing your how US. has with

Yes. Thanks, Hut Pizza On David. US first.

the one hiring attract or also some drivers our As practices that view we beginning a has capacity our been challenge to a to HR in capacity the one delivery market. apply how the Both that. about that year. things with have used on more challenge. and takes as we've we significantly a Plus, a year, the of addition We time of the delivery part to mode solve into our platforms jobs, with have David delivery at mentioned, solving earlier have the having those adjusted to challenge than think aggregators relationships the more mentioned like on at Hut. talked working it in them we mentioned of capacity this and job their aggregators, we've our both for practices as demand And service being us as more of franchisees contributed their Pizza reducing of I the

we at our points. our delivery XX In but to a If QX, carryout gap growth and you narrowed QX, XX-point growth. growth, carryout between gap we our actually the look had extended

significantly the that levers, platforms, one So which us other There's from both giving marketplaces. aggregator get an is benefit those sees customer, more delivery just those we incremental higher, us into I was think system. that's and to means who of the attributable delivery on capacity

we've so little the ahead that's that been faster And well. franchisees a of seen of a probably And we've an run as these impact bit there who earlier mentioned bit system. adopted

part in think So, system. what's is that Pizza driving the I Hut of US growth

Taco all on long driving markets we run, the KFC be growth Hut US obviously, question, stabilized. growth strong globe On expect US, we had Pizza and of in units. Bell the have unit our the in unit And around US, focused to

And now, a working so a the see businesses results as stable in this year. unit do on the Q&A strategies that. place you teams But in are of those are standpoint right from to End

delays conference by had field. our with we've up, four investor obviously, very in Yum!. the wrap We're Yeah. got first coming the and the years great conference led from actually a quarter teams strong investor that it's To up, for pleased COVID. an We've in given the results,

growth quarter, your about today. all New leaders really we've to in XX. you'll that for to thanks In to all we with get letting time particular, new tell in the of great get on time A for person you around hear from time great live the in December and the we're York excited business got eager stories So the first very spend on world. some that going some them have

today's concludes That conference call.