Pizza Hut snapped a streak of five straight quarters of declines in sales helping its parent Yum Brands post revenue and profit for its third quarter that beat expectations on Wall Street on Thursday.
Pizza Hut struggled during recent quarters amidst competition, in particular from Domino’s, which has kept its strong growth across the U.S. thanks in part to dominating digital ordering, promotions and customization.
However, the latest results from Pizza Hut showed efforts to make a turnaround through additional promotions and advertising were starting to pay off.
New measures including making the popular large $7.99 two topping pizza for online ordering as well as improving its app for mobile devices.
Sales at restaurants that have been opened a minimum of 13 months were up by 1%, in comparison to a drop of 0.5% that analysts were expecting.
Pizza Hut’s sales at same-restaurants increased by 4% in its developed markets that include regions such as Continental Europe, the United Kingdom and Japan. As the same time, Pizza Hut sales across the United States and in its emerging market were flat for the three-month period.
Yum Brands, which is also the owner of the Taco Bell and KFC chains, posted global sales growth for same-restaurants of 3% during the just completed quarter, which also was better than the increase of 1.7% that analysts on Wall Street were expecting.
Net income from its continuing operations was higher ending the quarter at $418 million equal to $1.18 a share, for the period ending September 30, in comparison to $218 million equal to 55 cents a share for the same three month in 2016.
Excluding certain items, the company posted earnings of 68 cents a share.
Revenue reached $1.44 billion for the quarter, in comparison to last year of $3.31 billion. Part of the reason for so much less revenue was the company spun off its business in China last year during November.
Analysts were expecting the company to have earnings per share of 67 cents on revenue exceeding $1.39 billion.
Fast-food and fast-casual restaurants are now starting to show signs of recovery from the massive shift by consumers of how they eat and what they eat as consumers are starting to require healthier food items at these locations and many are not eating out as much and that means delivery services have also become very important.