Yum! Brands, Inc. (YUM): BCG Matrix [Dec-2025 Updated]

You're looking to map out where Yum! Brands, Inc. is winning and where it's burning cash as we head into the end of 2025, right? Well, the latest data paints a clear picture: Taco Bell is firing on all cylinders, showing a +7% Same-Store Sales growth and cementing its status as a Star, while the venerable KFC continues to print money as a 44.6% margin Cash Cow. But the story isn't all good news; Pizza Hut is clearly the Dog, facing a -6% U.S. SSS decline and a strategic review, and Habit Burger Grill remains a costly Question Mark needing serious capital to scale. Dive in below to see the full four-quadrant breakdown of YUM's portfolio health and what these positions mean for your investment thesis.

Background of Yum! Brands, Inc. (YUM)

Yum! Brands, Inc. (YUM) is a major player in the global quick-service restaurant space, operating iconic brands like KFC, Pizza Hut, and Taco Bell, alongside The Habit Burger Grill.

As of the third quarter ended September 30, 2025, Yum! Brands reported total revenues of $1.98 billion for the quarter, with net income reaching $397 million. The company's adjusted earnings per share (EPS) for Q3 2025 was $1.58, marking a 15% year-over-year increase. For the twelve months ending September 30, 2025, the company's revenue stood at $8.061B, which represented an 11.6% increase year-over-year.

The overall performance in Q3 2025 showed worldwide system sales growth of 5%. This growth was significantly propelled by digital sales, which hit a record $10 billion, representing a record digital mix of approximately 60% of total sales. The company maintains long-term financial targets, aiming for an average annual unit growth of 5%, 7% system sales growth, and at least 8% core operating profit growth, all excluding foreign exchange impacts and the 53rd week.

Looking at the brand performance for Q3 2025, Taco Bell continued to show strong momentum; its U.S. system sales grew by 9%, and Taco Bell International system sales (excluding foreign currency translation) grew by 12%. The KFC Division reported Q3 revenues of $879 million and saw system sales rise by 6% globally, opening 760 gross new restaurants across 60 countries. KFC's segment operating margin expanded to 44.6%.

In contrast, the Pizza Hut Division opened 289 gross new restaurants, but the brand's performance indicated a need for significant action, leading Yum! Brands to initiate a thorough review of strategic options for Pizza Hut. The Habit Burger & Grill Division reported system sales growth of 3% and same-store sales growth of 1% in the quarter.

Financially, as of September 30, 2025, Yum! Brands held $1.05 billion in cash and cash equivalents, against long-term debt of $11.5 billion. Strategically, the company announced plans to complete the acquisition of 128 Taco Bell restaurants in the Southeast United States during the fourth quarter.

Yum! Brands, Inc. (YUM) - BCG Matrix: Stars

You're looking at the engine driving current growth for Yum! Brands, Inc. (YUM), which, by the metrics of the Boston Consulting Group Matrix, is clearly the Taco Bell division. This brand sits firmly in the Star quadrant because it commands a high relative market share in a market segment that is still expanding rapidly.

Taco Bell U.S. momentum in the third quarter of 2025 was exceptional. You saw Same-Store Sales (SSS) growth that was truly robust, coming in at a +7%. That kind of top-line performance in a mature category signals strong market leadership. Furthermore, the brand's operational efficiency is showing up on the bottom line; U.S. company-owned restaurant margins hit 23.9% for the quarter, which was a 50 basis point increase year-over-year.

Digital remains a massive tailwind for this Star. The entire Yum! Brands system hit record digital system sales of $10 billion, with the digital mix reaching approximately 60% in Q3 2025. This high mix is driven by successful innovation and a focus on easy customer experiences, which is exactly what you expect from a market leader investing heavily for the future. To fuel this continued expansion, Yum! Brands announced plans to acquire 128 Taco Bell restaurants across the Southeast U.S. during the fourth quarter of 2025. This move strengthens the equity-owned base with high-margin assets, which is a classic Star strategy to maintain control and drive further growth.

Here's a quick look at the key Q3 2025 performance indicators for this Star:

The investment required to keep this market share high in a growing segment means cash flow is tight-money coming in is largely reinvested for placement and promotion. The strategy here is clear: sustain this success until the market growth naturally slows, at which point this Star should transition into a Cash Cow. For you, the action is to monitor the integration of those 128 acquired units and ensure the digital mix continues to climb, as that's where future efficiency gains will come from.

The drivers behind this strong performance include:

• Strong U.S. momentum with 7% SSS growth.
• Restaurant-level margins at 23.9% in the U.S. company base.
• Digital sales mix reaching approximately 60%.
• Strategic acquisition of 128 restaurants planned for Q4 2025.

Finance: draft 13-week cash view by Friday, focusing on capital allocation for the 128 unit purchase.

Yum! Brands, Inc. (YUM) - BCG Matrix: Cash Cows

You're looking at the core engine of Yum! Brands, Inc. (YUM) portfolio, the brand that reliably funds the riskier ventures. As a Cash Cow, KFC operates with a high relative market share in what is generally considered a mature market, meaning it doesn't require massive promotional spending to maintain its position. This allows it to generate substantial cash flow, which is exactly what the company needs to cover overhead and seed growth elsewhere. Honestly, this brand is the bedrock of the entire operation.

Here's a quick look at the third-quarter 2025 performance that solidifies KFC's role as a cash generator:

That 44.6% operating margin is exceptional; it shows they've achieved significant competitive advantage and are running a tight ship, converting a high percentage of revenue into profit. Because the market is mature, the strategy shifts from aggressive market capture to efficiency. You see this reflected in the investment focus-it's less about massive advertising pushes and more about supporting infrastructure to keep that margin high and cash flow steady. The 760 gross new units opened internationally in the quarter, while impressive unit growth, is often focused on high-return, lower-cost franchise development rather than heavy corporate investment.

KFC is the division that Yum! Brands, Inc. relies on to keep the lights on and fund the Question Marks. It's the brand that generates more cash than it consumes, which is the definition of a Cash Cow in the Boston Consulting Group Matrix. You want to maintain this productivity, milking those gains passively while directing capital toward higher-growth areas. Still, you need to watch the U.S. market, as international development is carrying the load.

• KFC Division revenue was $879 million in Q3 2025.
• Operating margin hit 44.6%, an improvement of 150 bps year-over-year.
• International expansion saw 760 gross new units opened in the quarter.
• Q3 SSS growth registered at +3%.
• The brand is a global leader in the chicken category.

The focus here is on maintaining operational excellence and maximizing the return on invested capital, defintely not on risky, high-spend market share grabs. Finance: draft 13-week cash view by Friday.

Yum! Brands, Inc. (YUM) - BCG Matrix: Dogs

Dogs are business units characterized by low market share in a low-growth market. These units tie up capital without generating significant returns, making them prime candidates for divestiture or focused minimization efforts. For Yum! Brands, Inc. (YUM), the Pizza Hut division fits this profile due to persistent underperformance relative to the company's other banners.

The brand has struggled to maintain momentum, showing same-store sales declines for seven consecutive quarters leading into the third quarter of 2025. This sustained weakness is a key indicator of its Dog status within the portfolio.

The financial impact of this division's softness is clear in the profit figures. Pizza Hut operating profit fell 8% year-over-year for the third quarter of 2025, directly reflecting margin compression. This margin compression is quantified by the U.S. company restaurant margin shrinking to 35.1% from 38.3% year-over-year.

Given the need for additional action to realize the brand's full value, Yum! Brands initiated a formal strategic review of the Pizza Hut brand in November 2025. This review will explore a range of strategic options, potentially including outright divestiture, selling a stake, or forming a joint venture. The company retained Goldman Sachs and Barclays as financial advisers for this process.

• Pizza Hut U.S. SSS decline: -6% in Q3 2025.
• Pizza Hut U.S. System Sales decline: -7% in Q3 2025.
• Pizza Hut Operating Profit decline: 8% year-over-year.
• Pizza Hut contribution to total operating profit: Approximately 11%.

Yum! Brands, Inc. (YUM) - BCG Matrix: Question Marks

You're looking at the newest concept in the Yum! Brands, Inc. portfolio, the one that needs capital to prove its worth. This is where high growth potential meets low market penetration.

The Habit Burger Grill division is the smallest component of Yum! Brands, Inc. As of the third quarter of 2025, this division operated 377 units, significantly fewer than its siblings. This places it squarely in the competitive fast-casual burger segment, fighting for visibility against established players.

The performance metrics show volatility, which is typical for a Question Mark. For instance, the second quarter of 2025 saw Same-Store Sales (SSS) decline by -4%, clearly indicating a struggle to gain consistent traction and market share during that period. Still, the brand shows some forward movement; in the third quarter of 2025, system sales grew 3% and same-store sales actually grew 1%.

This business unit requires substantial investment to improve unit economics and scale effectively against rivals in the crowded burger space. The expansion pace reflects this need for capital infusion and strategic focus. In the third quarter of 2025, Habit Burger & Grill Division opened only 8 gross new restaurants, showing a relatively slow pace of expansion compared to the overall company unit growth of 1,131 gross new units in the same quarter.

The strategic imperative here is clear: heavy investment is needed to quickly capture market share before this unit either becomes a Star or, if investment stalls, devolves into a Dog. You need to watch the capital allocation toward this brand closely.

The investment decision hinges on whether the geographically tailored menu tests and premium-at-QSR-value proposition can translate into rapid, profitable unit expansion. Finance: draft 13-week cash view by Friday, focusing on the required capital outlay for this division.