Yum Brands Beats Earnings Despite Taco Bell Sick Scare
Yum Brands topped profit goals even as a tainted lettuce outbreak slowed Taco Bell sales.
Fast food giants rely on customer trust. Yum Brands faced a test this quarter when bad lettuce kept diners away from Taco Bell. A cyclospora outbreak cut store traffic, yet the company still beat Wall Street profit targets.
Taco Bell saw same-store sales drop during the scare. Sick customers traced the problem back to tainted lettuce at the chain. Even with this setback, the rest of the business stayed steady. Strong sales at other chains helped make up the difference.
Food safety scares hit fast and hard. Diners change their habits quickly when health risks pop up. The good news for Yum Brands is that its large footprint protects the bottom line from single-brand trouble.
Investors should watch Taco Bell traffic over the next few months. Fast food fans usually return once the food supply is clean. Look for fresh promotions as the chain works to win back daily customers.
Source: CNBC
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