Investment Thesis
YUM Brands exhibits concerning balance sheet deterioration with negative stockholders' equity of -$7.3B and liabilities exceeding assets by $7.3B, indicating severe financial distress. While operating metrics show strong profitability (31.3% operating margin, 19.0% net margin) and solid cash generation ($1.6B FCF), the inverted capital structure and substantial long-term debt ($11.8B) create significant refinancing and solvency risks that outweigh operational strength.
YUM Strengths
- Strong operating cash flow generation of $2.0B demonstrates underlying business cash earnings capability
- Exceptional operating margin of 31.3% and net margin of 19.0% show efficient operations and pricing power
- Solid free cash flow of $1.6B with 20% FCF margin indicates ability to service debt despite balance sheet stress
YUM Risks
- Negative stockholders' equity of -$7.3B signals technical insolvency and indicates excessive financial leverage or asset impairment
- Total liabilities of $15.5B exceed total assets of $8.2B by $7.3B, creating structural balance sheet imbalance
- Long-term debt of $11.8B combined with negative equity creates acute refinancing risk and limits financial flexibility
- Extreme revenue growth of 1739.5% YoY appears anomalous and suggests potential accounting changes, acquisitions, or non-recurring items requiring investigation
Key Metrics to Watch
- Stockholders' equity trend and path to positive equity restoration
- Long-term debt levels and refinancing schedule maturity profile
- Operating cash flow sustainability and capital allocation decisions
- Revenue normalization and recurring revenue quality after unusual 1739.5% growth
YUM Financial Metrics
YUM Profitability Ratios
YUM Balance Sheet & Liquidity
YUM 5-Year Financial Trend
5-Year Trend Summary: YUM BRANDS INC's revenue has grown significantly by 25% over the 5-year period, indicating strong business expansion. The most recent EPS of $5.59 reflects profitable operations.
YUM Growth Metrics (YoY)
YUM Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.8B | $382.0M | $1.35 |
| Q2 2025 | $1.8B | $367.0M | $1.28 |
| Q1 2025 | $1.6B | $253.0M | $0.90 |
| Q3 2024 | $1.7B | $382.0M | $1.35 |
| Q2 2024 | $1.7B | $367.0M | $1.28 |
| Q1 2024 | $1.6B | $300.0M | $1.05 |
| Q3 2023 | $1.6B | $331.0M | $1.14 |
| Q2 2023 | $1.6B | $224.0M | $0.77 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
YUM Capital Allocation
YUM SEC Filings
Access official SEC EDGAR filings for YUM BRANDS INC (CIK: 0001041061)