Is it the Doritos Difference? A breakfast-based boost? The days of slumping sales seem to be over for tortured Taco Bell, which helped owner Yum Brands Inc. haul in a 73% income increase in the first quarter.
The Mexican-style fast-food chain appears to have emerged from a miserable 2011, during which a controversy over its seasoned beef filling caused it to freely shed customers. Executives quickly rolled out initiative after initiative: Brand new breakfast offerings. Doritos Locos Tacos. A Cantina menu positioned as a Chipotle competitor.
The rescue mission is working, according to the company. Louisville-based Yum, which also owns KFC and Pizza Hut, reported profit of $458 million, or 96 cents a share, up from $264 million, or 54 cents a share, during the same quarter a year earlier. Excluding one-time items, EPS was 76 cents a share for the quarter, which ended March 24.
Same-store sales at U.S. Taco Bell stores jumped 6%; they rose 5% at Pizza Hut and 2% at KFC. Yum’s overall revenue soared 13% to $2.7 billion from $2.4 billion a year earlier.
Granted, Taco Bell shouldn’t take all the credit. Yum has been heavily expanding abroad, opening a record 168 restaurants in China alone, where Chief Executive David Novak said the business “continues to fire on all cylinders.”