Yum Brands (YUM) official guidance

We expect KFC to deliver its best development year ever as franchise partners' confidence in KFC's long-term potential translates into faster store expansion.

With that momentum, the franchise partner plans to open five more restaurants in Sweden this year and later expanding into Denmark.

By the end of the year, loyalty will be in markets representing over 75% of KFC system sales, excluding China, significantly expanding the brand's ability to engage consumers and drive frequency.

We currently expect to use a portion of anticipated net proceeds of $2.3 billion expected from the Pizza Hut transactions to pay down our revolver balance, and the majority of the remainder will be set aside for share purchases, with timing subject to market conditions.

Despite the deleveraging impact of temporarily depressed sales volumes, we believe Taco Bell's third quarter equity store level margins will range between 19% and 21%.

For the remainder of 2026, we anticipate $2.5 million in transition services-related fees per month, which will fully offset Yum! corporate G&A expenses previously allocated to the Pizza Hut division.

As a reminder, amortization of reacquired franchise rights is anticipated to increase $30 million this year, largely due to the acquisition of franchise stores by Taco Bell in Q4 2025.

We expect approximately $5 million of non-cash closure expenses for Habit as we opportunistically optimize our store network by making a small number of closures in subscale markets.

For this year, we expect our full year interest expense to fall in the range of $510 million-$520 million, excluding any potential debt issuances.

Recall, Taco Bell entered five new markets last year and plans to expand its market count further this year.

When you couple that with the additional debt capacity we generate each year from our profit growth and our 4x net leverage ratio expectation, that is a run rate of over $2.5 billion of cash generated annually that we expect to grow at a healthy clip each year going forward.

As we shared last quarter, full year ex special G&A growth, excluding Pizza Hut, is expected to be up mid-single digits.

To help model the shape of the year, we expect Q2 to reflect high single-digit growth year-over-year ex special, ex Pizza Hut G&A due to the timing of project spend.

Pizza Hut's Q1 core operating profit growth was in line with our guidance, and we expect Q2 core operating profit of approximately $70 million.

We now expect Taco Bell U.S. restaurant-level margins to be between 24.5% and 25.5%, reflecting better top-line momentum and higher margins than originally planned from the acquired Taco Bell stores.

The brand is relentlessly innovating for next-generation growth with clear 2030 ambition, including reaching approximately $3 million in U.S. average unit volume, expanding to 3,000 international stores, and delivering 25%-26% U.S. restaurant-level margin.

We expect our tax rate to be in the range of 22%-24%.

To help set expectations on key Pizza Hut business metrics for 2026, from a unit standpoint, we expect strong gross openings globally, which are seasonally in the back half of the year.

When excluding the Pizza Hut division, we are confident the rest of our portfolio will meet or exceed every component of our long-term growth algorithm, including delivering over 5% net new unit growth.

And the combination of factors, allows us to have confidence that we're gonna meet or exceed every element of the algorithm in 2026, including the 8% operating profit growth, ex Pizza Hut.