Yum! Brands IncYUM
▼ NegativeDemandrelevance
Cyclospora outbreak caused Taco Bell traffic to fall 31%, hurting sales.
Impact on stocks 2
Consumer Discretionary
Yum! Brands Inc
Chipotle Mexican Grill IncCMG
Mentioned
Yum! Brands reported second-quarter earnings that beat expectations, sending its stock up more than 3% despite a cyclospora outbreak that hit Taco Bell sales in July. The outbreak, linked to shredded iceberg lettuce from Taylor Farms de Mexico, caused daily traffic at Taco Bell to fall as much as 31% by July 17, and the CDC tied at least 1,947 illnesses and 98 hospitalizations to the chain. However, CEO Chris Turner said the sales decline was temporary, and by July 27, Taco Bell's U.S. same-store sales were down only 2% for the third quarter so far, recovering about halfway back to prior-year levels. Yum! posted adjusted earnings of $1.62 per share on revenue of $2.17 billion for the quarter ended June 30, before the outbreak began. The company expects third-quarter store-level margins at Taco Bell to be between 19% and 21%, down from 26.2% in the second quarter, and is leaning on value promotions to win back customers.
Yum! Brands IncCyclospora outbreak caused Taco Bell traffic to fall 31%, hurting sales.
Chipotle Mexican Grill Inc