Yum! Brands surpassed second-quarter earnings expectations as Taco Bell same-store sales grew 7%. However, much of the focus around the company has been on the cyclosporiasis outbreak that has been linked to lettuce served at Taco Bell.
The fast-food giant on Thursday posted adjusted earnings of $1.62 a share, up from $1.44 a year ago and just above Wall Street expectations of $1.58. Revenue grew 12% to $2.17 billion, slightly missing the analyst consensus call for $2.18 billion, according to FactSet.
Same-store sales at Taco Bell grew 7% and system sales at the chain increased 9% from last year. Worldwide system sales grew 5% in the quarter. There was no update in the earnings report around the cyclosporiasis outbreak.
The Food and Drug Administration on July 16 announced an investigation into the outbreak linked to lettuce served by Taco Bell. The outbreak has put pressure on Taco Bell daily traffic and on Yum! Brands stock. Shares have fallen 5% this month as of Wednesday's closing bell.
As of July 24, the cyclosporiasis outbreak, tied to iceberg lettuce sources from central Mexico, has resulted in 1,947 people being infected with at least 98 hospitalizations, according to the FDA and Centers for Disease Control and Prevention data. The data didn't reveal how many cases were suspected from Taco Bell.
The stock rose slightly in premarket trading Thursday after ending Wednesday up 1%.