LOUISVILLE, KY.  —Strong growth in its US Taco Bell business, major additions to its KFC restaurant count globally, and double-digit growth in the company’s digital sales were among highlights for Yum! Brands in the full year and fourth quarter of 2024. Taco Bell and KFC remained the company’s principal growth drivers with Pizza Hut still struggling to gain traction.

Net income in the year ended Dec. 31 was $1.49 billion, equal to $5.25 per share on the common stock, down 7% from $1.6 billion, or $5.68 per share, in 2023. Total revenues were $7.55 billion, up 7% from $7.08 billion in 2023. Excluding special items, earnings in 2024 were up 6% from a year earlier.

“Twenty-twenty four was marked with exceptional core operating profit growth given the complex consumer environment,” said David W. Gibbs, chief executive officer. “Twenty-twenty four again demonstrates the resilience of our business model and the agility of our world-class teams. Our twin growth engines remain strong with Taco Bell US delivering same-store sales growth of 5% in the fourth quarter, meaningfully outpacing the industry, and KFC International delivering its second consecutive year with over 2,000 net new units.”

In the fourth quarter, Yum! Brands net income was $423 million, or $1.51 per share, down 8% from $463 million, or $1.65, in the last quarter of 2023. Net sales were $2.36 billion, up 16% from $2.04 billion in the fourth quarter last year. Excluding special items, fourth-quarter earnings were up 28%.

During a call with analysts Feb. 6, Gibbs offered an upbeat view of prospects for the new year.

“Looking ahead to 2025, our focus will be on striking the right balance between everyday value and disruptive campaigns to engage a broader consumer base,” he said. “Additionally, we are committed to enhancing the digital experience with improvements to our app platform that will elevate engagement and bring value to the forefront of the consumer journey with Pizza Hut.”

Yum! reaffirmed its long-term growth algorithm of 5% unit growth, 7% system sales growth and 8% core operating profit growth. Shareholders appeared impressed by the company’s results and prospects. In trading on the New York Stock Exchange Feb. 6, the company’s shares jumped 10%, closing at $144.01 and reaching a new 52-week high.

Highlighting the company’s 2024 progress, Christopher L. Turner, chief financial officer, said 4,535 new stores across all of the company’s brands were opened last year in more than 100 countries. The company’s digital sales rose 15% with digital mix topping 50% “reflecting steady progress toward our ambition to reach 100% digital sales.”

Biggs said digital sales jumped more than 20% excluding China, driven by expanded kiosk adoption. 

“With more than 50% of stores outside China equipped with kiosks at year-end 2024, our teams are focused on reaching 70% penetration by 2026,” he said.

In connection with its digital growth goals, Yum! announced the launch of Byte by Yum!, which it described as a proprietary software as a service (SAAS) digital ecosystem driven by artificial intelligence.

“Byte by Yum! enables easy operations for team members and consumers, while consolidating essential systems into a cohesive, easy-to-manage platform,” the company said. “Byte by Yum! is Yum’s owned platform of integrated industry-leading restaurant technology, powered by AI, that includes mobile app and web ordering.”

Turner said Taco Bell, KFC, and Pizza Hut in the United States “are all now powered by” the Byte digital ordering products.

During the fourth quarter, same-store sales excluding the effects of foreign exchange swings rose 8%, including 6% for KFC Division, 14% for Taco Bell Division and 3% for Pizza Hut Division. Including foreign exchange, same-store sales rose 1%.  The company’s units were up 4%. Operating profit was up 8%, 17% for core operating profit. Both KFC and Taco Bell enjoyed double-digit growth in operating profit in the fourth quarter.

Among highlights in the fourth quarter, company-owned Taco Bell restaurant margins expanded 240 basis points year over year to 25.5% (40 basis points were the result of an extra week versus 2023). The company added 347 new restaurants (gross) across 25 countries in 2024.

In the United States, Gibbs noted Yum!’s “value leadership” in its $7 Luxe box, which he called “one of the most compelling value offerings in the industry.”

Regarding Pizza Hut, Gibbs said value competition across the quick-service restaurant category generally and the pizza category in particular weighed on results.

“We’ve seen that everyday value offerings such as the $7 deal lovers, effectively drive repeat visits from existing consumers,” he said. “However, to attract lighter lapsed consumers, we must lean further into disruptive and distinctive value promotions. Looking ahead to 2025, our focus will be on striking the right balance between everyday value and disruptive campaigns to engage a broader consumer base. Additionally, we are committed to enhancing the digital experience with improvements to our app platform that will elevate engagement and bring value to the forefront of the consumer journey with Pizza Hut.”

After years of strengthening its balance sheets, Yum! Brands has reached a point the company will pause its debt reduction, Turner said. 

“Given our continued confidence in Yum!’s future trajectory and that our leverage has drifted lower by a full turn, we plan to deliver materially higher capital returns going forward than in the past two years,” he said. “Specifically, and subject to market conditions, we expect to stop deleveraging and maintain our net leverage ratio at approximately four times over the medium term by issuing incremental debt as our business grows.”

He said the move is consistent with the company’s objective of maximizing shareholder return while maintaining a strong balance sheet and paying a competitive dividend.

In its earnings announcement, Yum! said that during January it terminated its franchise agreements with franchisee IS Gida AS (IS Gida), the owner and operator of KFC and Pizza Hut restaurants in Turkey, citing IS Gida’s “failure to meet Yum! Brands’ standards.”

“The termination affects 284 KFC and 254 Pizza Hut restaurants in Turkey,” the company said. “Yum! Brands is actively identifying the right growth-minded franchise partner to drive future success in Turkey.”

During the call, Gibbs said the developments in Turkey were unlikely to significantly affect Yum! results in 2025.