Taco Bell has consistently delivered on sales for the better part of this decade, and Greg Creed, the chief executive of its parent company Yum! Brands, promised Thursday morning that the Mexican-influenced chain will continue to deliver — in more than one way.
During a call with analysts, Yum executives announced that as part of a previously revealed partnership, the company is now offering delivery through Grubhub’s website and mobile app at more than 4,000 Taco Bell locations in the United States. For a limited time, orders exceeding $12 will be eligible for free delivery.
“Taco Bell has delivered and will continue to deliver,” Creed said referring to sales. “They are just doing everything right, led by a great executive team and president.”
The addition of delivery service will only enhance that, he added. Yum also is working with Grubhub on future delivery at KFC locations after investing $200 million in the online commerce platform in early 2018.
When asked why it took a year for delivery through Grubhub to debut, Creed replied that the company wanted to ensure its integrated point-of-sale system with Grubhub was working optimally before launching delivery at Taco Bell.
“We have gone a little slow early to accelerate” speed of service, the accuracy of orders and delivery once it launched, he said.
Pizza Hut, Yum’s third brand, has its own in-house delivery system.
During the analyst call, Yum executives stated that they are starting to see a turnaround in Pizza Hut, which has lagged in sales behind its sister brands. The pizza chain is being bolstered by its sponsorship deal with the NFL, which it secured after Louisville company Papa John’s and the NFL parted ways following comments by founder John Schnatter.
“Pizza and sports go hand in hand,” Creed said, adding that partnerships with the players and teams will create unique branding opportunities.
Pizza Hut’s same-store sales remained flat in 2018 compared to 2017, Yum reported Thursday. Meanwhile, its sister brands KFC and Taco Bell reported same-store sales increases of 2 percent and 4 percent, respectively.
Full-year earnings per share for Yum rose 24 percent, to $4.69. Revenues for 2018 were $5.7 billion, down 3 percent from $5.9 billion in 2017, though net income jumped 15 percent to $1.5 billion in 2018.
“Combined across our brands and led by over 2,000 world-class franchisees, we opened a record eight gross new restaurants per day across the globe in 2018,” Creed said in the earnings release. “As we move into 2019, we will continue to pursue even more growth, leverage our unprecedented scale, and maximize value for all Yum! stakeholders.”
In 2018, Yum refranchised 660 restaurants across its three brands for pre-tax proceeds of $825 million, and it repurchased 28.2 million shares, totaling $2.4 billion, at an average price of $85.
“We made significant progress on our transformation commitments in 2018, having achieved our goal of becoming at least 98 percent franchised,” said David Gibbs, chief operating officer, CFO and president of Yum, in the earnings release. “Our commitment to being more focused, more franchised and more efficient is strengthening our enviable business model. Yum! is well positioned to leverage our massive scale and expand our capabilities in order to improve franchise unit economics and accelerate growth.”