The company, the parent company of multiple fast food brands including Taco Bell, KFC and Pizza Hut, said sales took a hit in the fourth quarter amid ongoing tensions in the Middle East.
Yum Brands CEO David Gibbs said: during a call with an investor “Sales were impacted by conflicts in the Middle East, with varying degrees of impact across the Middle East, Malaysia and Indonesia markets,” it said on Wednesday.
“This has been a low-single-digit headwind to Yum’s overall sales growth,” Gibbs said, adding that the company expects the impact on sales to diminish during 2024.
Yum Brands becomes at least the third major restaurant company to claim sales have declined as a result of Israel’s war with the Palestinian militant group Hamas, following earlier reports by Starbucks and McDonald’s.
KFC’s Middle East division was down 5% in the quarter, while Pizza Hut’s regional division was down 3%, according to the financial report.
Overall, KFC posted a 2% sales increase in the fourth quarter. According to the earnings report, That’s more than two points lower than StreetAcount’s estimate of 4.7%, according to CNBC.
Meanwhile, Pizza Hut reported a 2% decline in same-store sales. U.S. same-store sales fell 4%, but overall overseas sales were flat.
The pizza chain came under intense scrutiny last month after a photo was circulated on Pizza Hut Israel’s Instagram account that appeared to show the company handing out free pizza to Israeli Defense Force soldiers in the country. KTLA reported.
The post, which has since been deleted, sparked calls to boycott the company in protest of Israeli airstrikes on Gaza that have killed more than 27,700 people since early October, according to statistics from the Hamas-run organization. Gaza Ministry of Health.
Taco Bell, a major contributor to Yum’s overall profits, reported a 3% increase in sales, down from 11% in the same period last year. CNN Business reportedwhich was also below analyst expectations.
The poor sales report came days after McDonald’s reported lower-than-expected sales, which it said reflected the “effects of the war” between Israel and Hamas.
fast food company faced similar backlash Last year, Israel handed out thousands of free meals to Israeli troops and citizens following a surprise Hamas attack on southern Israel that killed around 1,200 people.
Starbucks also faces a boycott over its alleged support for Israel. Last week, the company lowered its sales forecast due to weak spending in China and other markets, according to the Associated Press.
Copyright 2024 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
