Yum Brands reported stronger-than-expected adjusted earnings for its fiscal third quarter on November 3, 2026, despite weaker customer traffic at Taco Bell following a cyclospora outbreak linked to iceberg lettuce served at its restaurants. The outbreak reduced Taco Bell's same-store sales and affected the restaurant group's overall performance, although the company said sales trends have since recovered.
According to financial results reported by Yum Brands, adjusted earnings reached $1.56 per share, exceeding the $1.49 analysts expected, based on an LSEG survey. Revenue totaled $2.05 billion, matching Wall Street's forecast and representing a 4% increase in net sales.
The company recorded quarterly net income of $1.62 billion, equivalent to $5.92 per share, compared with $397 million, or $1.41 per share, in the same period a year earlier. The latest results included gains associated with the Pizza Hut divestiture and other items. Excluding those factors, adjusted earnings stood at $1.56 per share.
Yum Brands identifies Taco Bell as a "growth engine" for its business. However, the foodborne illness outbreak contributed to a 4% decline in the chain's US same-store sales during the quarter as some customers temporarily reduced restaurant visits.
Yum Brands CEO Chris Turner said the recovery had gained momentum after September. He highlighted Taco Bell's improving performance against the broader quick-service restaurant industry.
"Since the end of September, Taco Bell U.S. has been outpacing the [quick-service restaurant] industry on same-store sales growth," said Chris Turner, CEO of Yum Brands.
The company had previously identified the weekend of July 18 as the period when the outbreak caused the greatest sales disruption. Subsequent improvements in customer demand helped restore the chain's performance, according to the company's statements.
Outside the United States, Taco Bell's smaller international operations recorded 5% same-store sales growth, contrasting with the decline in its domestic business.
Other restaurant divisions delivered mixed results. KFC posted a 1% increase in same-store sales, supported by system sales growth in China and Europe, according to Yum Brands' quarterly report.
However, KFC faced weaker conditions in the United States. System sales in the country, which has become the chicken restaurant chain's third-largest market, contracted 6% during the quarter.
The US performance reflects challenges facing major quick-service restaurant operators as competition intensifies and consumers become more cautious about spending. KFC has encountered similar pressures as other established chains compete with newer market entrants.
Yum Brands also completed the divestiture of Pizza Hut during the reporting period. The company transferred its mainland China business to Yum China on August 7 and sold the remaining Pizza Hut operations to LongRange Capital on September 1.
Consequently, Yum Brands' third-quarter financial statements included Pizza Hut's operations only through the respective completion dates of those transactions. Excluding Pizza Hut, the company's overall same-store sales remained flat for the quarter, with Taco Bell's domestic weakness weighing on the result.
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