Why Yum Brands had its first negative quarter since the pandemic

During Yum Brands’ earnings call Wednesday morning, executives were somewhat upbeat, touting the resiliency of the company’s brands in a challenging operating environment and pointing to core operating profit gains and digital sales increases as reasons for their optimism. Additionally, executives cited sequential improvements from January’s weather impacts, as well as easing headwinds from tension in its Middle East markets.

Technology was the focal point of that optimism, with CEO David Gibbs noting that Q1 marked the first time the Yum system surpassed over 50% in digital sales, representing about $30 billion in annualized, digital sales. These sales were driven by the continued rollout of Click and Collect and kiosks.

One example is voice AI at the drive-thru, which Yum has been testing at five Taco Bell restaurants in California. The company is expanding the test into 30 restaurants in Q2 based on positive feedback. Yum is also piloting AI in its proprietary app, which makes it easier for general managers to access information to make decisions.