(Reuters) – Yum Brands Inc YUM.N reported a smaller-than-expected drop in comparable sales on Thursday, helped by a spike in online orders for its tacos as pandemic fears kept customers at home.
Fast-food chains, including Yum and rivals McDonalds MCD.N and Chipotle Mexican Grill CMG.N, have been benefiting from earlier investments in their digital presence, as online orders jumped, especially when dining rooms were closed at the height of the COVID-19 health crisis.
“For the second consecutive quarter, digital sales increased by more than $1 billion over the prior year and set a single quarter record of $4 billion,” Chief Executive Officer David Gibbs said.
Net income rose about 11% to $283 million in the third quarter, as Yum recorded $8 million of pre-tax income due to the change in fair value of its investment in food delivery firm Grubhub Inc GRUB.N.
Yum said it disposed its investment in Grubhub, a food delivery app it invested in over two years ago, during the quarter for $206 million.
Grubhub will likely be bought by European online food-ordering company Just Eat Takeaway.com NV TKWY.AS for $6.9 billion.
Yum’s comparable sales fell 2% for the KFC owner in the quarter ended Sept. 30, but beat the average analyst estimate of a 3.74% slide, according to IBES data from Refinitiv.
Taco Bell posted comparable sales growth of 3%, well above the estimate of a 1.75% rise.
At Pizza Hut, the company’s pizza chain that has long been grappling with stiff competition from Domino’s Pizza and others, comparable sales were down 3% and slipped 4% at KFC.
Excluding one-time items, the company earned $1.01 per share, compared with the estimate of 80 cents.
Total revenue rose about 8% to $1.45 billion.
