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What’s happening: Shares of Yum! Brands gained on Tuesday, after the company released its third-quarter results.
What happened: The restaurant chain operator reported weaker-than-expected earnings for its third quarter on Tuesday.
Yum saw a decline in same-store sales at both its KFC and Pizza Hut chains but reported sales growth at one of its major franchises.
How were the results: The Louisville, Kentucky-based company reported single-digit growth in sales for the third quarter.
Why it matters: Several restaurant chains recorded lower sales as customers continued to look for discounts and offers amid high menu prices.
Sales were impacted by “pressures relating to geopolitical conflicts and challenged consumer sentiment,” CEO David Gibbs said.
Yum! Brands reported a decline in global same-store sales, with its KFC franchise seeing sluggish demand.
Same-store sales grew by 4% for Taco Bell in the US and by 9% for KFC International. However, same-store sales contracted by 4% at each of its KFC and Pizza Hut locations. Overall, same-store sales at Yum fell 2% during the third quarter, versus market expectations of growth.
GAAP operating profits rose by 1%, while core operating profits climbed 3% during the quarter.
Management guided to core operating profit growth in the mid to high single-digit range for the fourth quarter.
How shares responded: Shares of Yum! Brands rose 1.5% to close at $134.72 on Tuesday, following the release of quarterly results. The stock has lost around 1% over the past month.
What to watch: Investors will continue monitoring overall inflation rate and geopolitical tensions. Markets will also watch sales at the company’s KFC chain, which seems to be losing favour among customers.
Context: The CAD/USD forex pair fell this morning, as investors awaited the next US President to be announced and assessed the latest economic data from Canada.
Details: Election results continue to be tallied across the US, with investors not expecting a blowout margin of victory for either candidate. Democratic nominee Kamala Harris and Republican candidate Donald Trump are looking at the so-called swing states (Pennsylvania, North Carolina, Georgia, Arizona, Nevada, Wisconsin, and Michigan) to give them an edge in the Presidential race. Meanwhile, the US dollar is already pricing in a Trump victory.
Imports to Canada declined by 0.4% to C$65.2 billion in September, the lowest level in four months. Exports from Canada slipped by 0.1% to C$63.88 billion.
The S&P Global Canada services PMI rose to 50.4 in October, from 46.4 in September, returning to the expansion zone. Composite PMI also climbed to 50.7 in October, versus 47.0 in the previous month.
The Bank of Canada has cut its benchmark interest rate by 125 bps since June this year, including the recently announced rate cut of 50 bps.
Weakness in price of crude oil, one of Canada’s major exports, exerted further pressure on the loonie. WTI crude oil prices fell 0.4% to $71.70 per barrel this morning.
Strength in the US dollar also weighed on the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.7% to 104.18 this morning.
The CAD/USD forex pair slipped around 0.4% to 1.3883 this morning. The S&P/TSX Composite Index ended Tuesday’s session at 24,387.90, up 0.54%.
What to watch: Investors await the release of economic data on Ivey Purchasing Managers Index from Canada today. The Ivey Purchasing Managers Index in Canada, which surged to 53.1 in September, is expected to rise further to 54.2 in October.
Other Markets: US trading indices closed higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.02%, 1.23% and 1.32%, respectively.
German Foreign Minister Baerbock announced plans to provide further aid worth €200 million to Ukraine. The news sent the safe-haven US dollar index higher in forex trading this morning.
Japan’s services PMI came in at 49.7 in October, slightly higher than a flash reading of 49.3. However, the country’s services activity slipping into the contraction zone, from a reading of 53.1 in the previous month, exerted pressure on the JPY/USD forex pair.
Australia’s Ai Group Industry Index fell sharply by 10.1 points to a reading of -28.8 in October. This being the 30th month of decline sent the AUD/USD pair lower in forex trading this morning.
New Zealand’s unemployment rate rose to 4.8% in the third quarter, from 4.6% in the previous quarter. The country’s jobless rate surging to the highest level since the December quarter of 2020 exerted pressure on the NZD/USD forex pair.
The American Petroleum Institute said that US crude oil inventories rose by 3.132 million barrels in the week ended November 1, compared to a decline of 0.573 million barrels in the previous week, which sent the WTI crude oil prices lower this morning.
Russia’s composite PMI and services PMI, Germany’s factory orders, new passenger car registrations, composite PMI and services PMI, Spain’s composite PMI and services PMI, Italy’s new passenger car registrations, composite PMI and services PMI, France’s composite PMI and services PMI, Eurozone’s producer price inflation, composite PMI and services PMI, UK’s composite PMI and services PMI, Mexico’s auto exports and car output, US MBA mortgage applications, crude oil inventories, gasoline stocks change and distillate stocks, as well as Brazil’s balance of trade.
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