(Reuters) -Yum Brands missed analysts' estimates for second-quarter comparable sales and profit on Tuesday, hit by higher ingredient costs and muted demand that weighed on its businesses, including Taco Bell.
Concerns over the impact of steep tariffs and economic growth have dented U.S. consumer spending on eating out, prompting fast-food chains, including Yum Brands, McDonald's and Burger King-owner Restaurant Brands, to launch budget-friendly meal deals to boost foot traffic.
Taco Bell, which accounts
for 38% of the company's total revenue, rolled out meal boxes ranging from $5 to $9. Still, its same-store sales growth in the U.S. — the biggest market — slowed to 4% during the second quarter from 5% a year earlier.
Among other restaurant chains, Chipotle Mexican Grill cut its annual sales growth forecast and missed quarterly sales estimates on weak demand. Burger giant McDonald's, which is set to report on Wednesday, warned of tough conditions in May owing to tariff uncertainty.
The Trump administration's unpredictable trade policies have also made it harder for businesses to plan operations, disrupted supply chains and increased costs.
Yum's worldwide same-store sales rose 2% during the quarter ended June 30, below analysts' average estimate of a 2.37% increase, according to data compiled by LSEG.
Total costs and expenses for the quarter were up 13%.
Revenue was at $1.93 billion during the quarter, compared with the estimate of $1.94 billion.
Excluding items, the company earned $1.44 per share, while analysts estimated $1.46 per share.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shilpi Majumdar)
