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Yum! Brands, Inc. YUM is likely to benefit from digital transformation, product innovation and expansion efforts. Also, increased kiosk adoption and targeted loyalty initiatives bode well. However, an uncertain macroeconomic environment is a concern.
Let us discuss the factors that highlight why investors should retain the stock for now.
Factors Driving Growth
Year to date, the company’s shares have moved up 17.7% compared with the industry’s 1.4% growth. YUM has been benefiting from a strategic blend of value offerings and digital innovation.
During the fourth quarter of 2024, worldwide comps at Yum! Brands inched up 1% year over year against a 2% fall reported in the previous quarter. The upside can be attributed to strong recoveries in the Middle East and solid performances in Africa, Latin America and Canada. Additionally, several key markets, including Asia (except China), showed notable quarter-over-quarter momentum, with a five-point improvement.
Looking ahead to 2025, Yum! Brands aims to deepen market penetration by expanding relevant product offerings — such as tenders, nuggets, twisters and sandwiches — while refining pricing strategies to enhance value perception. The company expects continued same-store sales improvement, supported by stronger value perception scores, a recovery in Middle Eastern markets and sustained momentum at Taco Bell U.S.
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Yum! Brands is strengthening its digital ecosystem to enhance customer engagement and operational efficiency. In 2024, digital sales grew 15% year over year to over $30 billion, reflecting increased kiosk adoption and the success of targeted loyalty initiatives. Loyalty programs remain key growth driver, with early data showing a 12% increase in visit frequency among loyalty members. The company plans to further optimize loyalty strategies in 2025, reinforcing its commitment to digital-first consumer engagement.
YUM is focused on creating seamless interactions for customers to drive growth. In 2024, the company reported substantial progress in deploying the Byte digital ordering platform, previously known as Yum! Commerce. The platform focuses on streamlining restaurant operations through integrated technology solutions. It powers digital ordering at Taco Bell, KFC and Pizza Hut in the United States. Additionally, three international Pizza Hut markets, including the U.K., migrated to Byte, driving over 50% growth in digital transactions through the app and improving processing times. In 2025, YUM plans to expand Byte to five more markets, integrating AI-driven personalization and omnichannel loyalty software.
Yum! Brands continues to grow aggressively, reinforcing its market leadership. In 2024, the company opened 4,500 new units globally, led by 2,900 KFC locations. Taco Bell demonstrated strong growth in the United States, increasing consumer frequency across all income segments. International expansion remains a key focus, with notable growth in China, India and Latin America. The company is also testing innovative formats such as Saucy by KFC and Live Más Cafe by Taco Bell. YUM expects 4% to 5% net unit growth in 2025, signaling continued expansion.