Yum! Brands Q2 FY2026: revenue up 12.2%, GAAP EPS $3.08 flattered by a tax benefit
Yum! Brands' GAAP profit looks spectacular and mostly isn't: a $449 million tax benefit tied to the Pizza Hut review turned $449 million of adjusted net income into $853 million of reported net income. Revenue rose 12.2% to $2.169 billion, but EPS excluding Special Items of $1.62 beat the $1.5954 consensus by roughly $0.02. Read this quarter through adjusted earnings and the divisions, not the headline EPS.
1 · Expected vs. Actual
Free preview belowReported EPS of $3.08 is more than double last year's $1.33, yet $1.46 of it is Special Items EPS, chiefly the $449 million tax benefit that drove the GAAP effective tax rate to negative 60.1%. Strip Special Items out and EPS was $1.62, up 12% from $1.44 and just above the $1.5954 consensus estimate. The operating beat is real but thin; the moonshot number is an accounting event.
Revenue was $2.169 billion, up 12.2% from $1.933 billion a year ago, but the growth came disproportionately from company-owned restaurant sales, which rose 25% to $837 million, versus 7% growth in franchise revenue to $895 million. Advertising contributions added only 2%, reaching $438 million. Because company sales carry food, labor and rent, gross margin slipped to 67.7% from 71.0% — that is revenue mix, not a pricing problem.
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Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-09-17
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