YUM US S&P 500Russell 1000 Earnings call · transcribed from the recording
Yum! Brands (YUM) · Q3 2026 results and valuation
Share price: $160.21 · 2026-11-11
Results Q3 2026 vs Q2 2026 · previous quarter · published 3 Nov 2026 and 30 Jul 2026
Net income up 90.3% on the previous quarter. Management sounded upbeat, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
+90.3%
Net income vs Q2 2026
Outlook given
Net income 1.62B vs 853.0M
Revenue −5.3%
Against the same quarter last year (Q3 2025) it is +308.8%, so it is not just seasonal.
2 · How management spoke
Upbeat
More upbeat than 69% of company calls
Answers to analysts: very upbeat, in line with the script.
Similar to last call.
3 · What stood out
Figure
Loyalty program also grew meaningfully throughout Q3, contributing to 25% growth in total membership year over year.
Valuation
Is Yum! Brands undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 6.3% growth a year (3-year revenue growth), the model's fair value is $56.42 a share — the stock trades 184% above it. Today's price assumes 15.4% growth a year.
Current price
$160.21
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+15.4% for 10 yrs
Fair value / share
$56.42
Buy below
$42.32
Price vs fair value
Overvalued 184%
Price vs buy-below price
Overvalued >200%
Read between the lines
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Guidance
Of these actions, Yum! Brands expects Q4 restaurant-level margins in the range of 21.5% to 23.5%, representing a sequential improvement from Q3, and also reflects continued sales improvement...
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Guidance
As mentioned previously, Yum! Brands expects to mitigate the associated corporate GNA costs over time.
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Fading
As part of the strategy, KFC will modernize the brand and focus on menu innovation surrounding boneless chicken.
Source quote
“As part of the strategy, KFC will modernize the brand and focus on menu innovation surrounding boneless chicken, crave-worthy sauces... ...progress, KFC outlined how it will build on its momentum by setting the standard for modern chicken QSR. Our consumers will experience new tenders in select markets that are built for dunking, dipping and solo snacking, an expanded sauce pantry of 9 bold sauces unlocking customization and flavor discovery and updated branding across digital and in-restaurant touch points.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“System sales grew an impressive 9%, with an acceleration in same-store sales growth to 4%, reflecting disciplined value execution, high-impact innovation, and continued digital and delivery growth.”
“Turning to KFC China, which represents approximately 20% of KFC's divisional operating profit, system sales grew 3%, driven by strong unit growth supported by very attractive paybacks.”
“YUM's asset-light model and strong cash generation give us the flexibility to invest behind our highest return growth opportunities while also delivering dependable capital returns to shareholders.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 2.05B | 2.17B | −5.3% | 1.98B | +3.8% |
| Gross profit | 1.38B | 1.47B | −6.4% | 1.39B | −1.2% |
| Operating income | 2.32B | 655.0M | +253.7% | 666.0M | +247.9% |
| Net income | 1.62B | 853.0M | +90.3% | 397.0M | +308.8% |
| EPS | 5.92 | 3.08 | +92.2% | 1.41 | +319.9% |
| P/E today 13.0 | 11.0 | 20.1 | −9.1 | 29.6 | −18.6 |
Topics
Most discussed now
- For more details on Yum! Brands' reporting calendars by market, please refer to the financial reports section of its IR website.
- These priorities will accelerate growth and deliver high quality, consistent total shareholder returns over the long term.
- With the transactions behind us, Yum enters its next chapter, having a sharper focus on Yum! Brands' raise the bar priorities,...
- Factor, the successful completion of the Pizza Hut divestiture during the quarter, which resulted in a one-time gain and...
- In the third quarter, Taco Bell achieved restaurant-level margins of 20.2%, demonstrating strong restaurant-level execution despite the…
Faded since Q2 2026
- Fading The ability of Yum! Brands' teams to enter into 2 separate transactions simultaneously while achieving strong performance in its other…
- Fading Achieved restaurant level margins of 26.2%, a 170 basis point expansion year-over-year, reflecting strong sales leverage, P&L cost…
- Fading Digital sales approached $9 billion and digital mix reached 61%, excluding Pizza Hut, reflecting steady growth across app, loyalty, kiosk...
- Fading Yum! Brands has got strong restaurant economics in many markets.
Latest announcements
Official filings, newest first.
- Results of operations · SEC 8-K
- Director or officer change; Regulation FD disclosure; Other events · SEC 8-K
- Director or officer change · SEC 8-K
- Material agreement; Acquisition or disposal; Regulation FD disclosure · SEC 8-K
- Results of operations · SEC 8-K
- Material agreement; Other events · SEC 8-K
- Regulation FD disclosure · SEC 8-K
- Director or officer change · SEC 8-K