Yum Faces Taco Bell Outbreak Fallout as Traffic Drops Double Digits Before $2.2 Billion Q2 Report
Updated
Updated · CNBC · Jul 29
Yum Faces Taco Bell Outbreak Fallout as Traffic Drops Double Digits Before $2.2 Billion Q2 Report
3 articles · Updated · CNBC · Jul 29
Summary
Thursday's Yum earnings call is set to focus less on second-quarter results than on Taco Bell's outbreak fallout, after FDA-linked cyclospora cases drove double-digit daily traffic declines at the chain.
1,947 illnesses and 98 hospitalizations have been tied to the outbreak, with federal agencies pointing to Taylor Farms iceberg lettuce; Taco Bell pulled the product by July 17, but the CDC has not declared the outbreak over.
Yum shares have fallen 5% since the FDA linked Taco Bell to the outbreak, and seven analysts have cut full-year EPS estimates since June 30 as investors brace for weaker Taco Bell performance in Q3 and Q4.
Wall Street still expects Q2 EPS of $1.58 on $2.2 billion in revenue and 7% same-store sales growth at Taco Bell because the quarter ended before the outbreak was linked to the chain.
Taco Bell is trying to rebuild trust with CEO Sean Tresvant's public pledge on safety and $1 menu promotions, while analysts see a McDonald's-style short-term hit as more likely than Chipotle's years-long slump.