Raphael Stevens

Taco Bell parent Yum Brands fell short of Wall Street’s earnings estimates but beat revenue expectations.
Taco Bell, KFC and Pizza Hut all saw company restaurant margins shrink during the quarter.
Yum reported same-store sales growth of 5% compared with the year-ago period and 4% on a two-year basis.

Customers wearing Taco Bell foam taco hats exit the company’s restaurant, a unit of Yum! Brands Inc. in Bangkok, Thailand.
Brent Lewin | Bloomberg | Getty Images

Yum Brands on Wednesday reported mixed results for its fourth quarter as higher costs weighed on profits, leading to an earnings miss.
Shares of the company rose less than 1% in premarket trading.

Here’s what the company reported for the quarter ended Dec. 31 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $1.02 adjusted vs. $1.09 expected
Revenue: $1.89 billion vs. $1.88 billion expected

Yum reported fourth-quarter net income of $330 million, or $1.11 per share, down from $332 million, or $1.08 per share, a year earlier.
Excluding items, the company earned $1.02 per share, falling short of the $1.09 per share expected by analysts surveyed by Refinitiv.
Taco Bell, KFC and Pizza Hut all saw company restaurant margins shrink during the quarter. Across the restaurant industry, operators have been dealing with higher food, freight and labor costs.
Net sales rose 8% to $1.89 billion, topping expectations of $1.88 billion. Yum reported same-store sales growth of 5% compared with the year-ago period and 4% on a two-year basis.

Taco Bell reported the highest jump in same-store sales growth of Yum’s portfolio. The Mexican-inspired chain saw its same-store sales climb 8% after several weaker quarters, hurt by a lack of late-night and morning customers.
KFC’s same-store sales rose 5% in the quarter. In the U.S., its second-largest market, same-store sales jumped 4%. Its domestic market accounts for less than a fifth of its system-wide sales. Shrinking system-wide sales in China, its largest market, weighed on the chain’s overall same-store sales growth.
Pizza Hut reported same-store sales growth of 3%. The pizza chain’s U.S. same-store sales ticked up just 1% in the quarter as the market faced tough comparisons to last year’s same-store sales growth. In the U.S., Pizza Hut has been trying to mount a comeback, an effort that was initially helped by soaring demand for its pizza during lockdowns.
Read the full earnings report here.

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Demand for at-home Covid tests and vaccines lifted overall store sales, helping CVS Health top expectations for fourth-quarter earnings.
The drugstore chain administered more than 20 million Covid vaccines in the three-month period, a significant jump from the number it gave in each of the prior two quarters.
The company said it also benefited from the growth of specialty pharmacy.

Teacher Jennifer Hogan, a reading specialist in the Lynn Public Schools, had tears in her eyes when she got her COVID-19 vaccine at a CVS in Medford, MA on March 5, 2021.
Suzanne Kreiter | Boston Globe | Getty Images

CVS Health said Wednesday that demand for Covid vaccines and at-home Covid tests lifted overall store sales, helping the company top expectations for fourth-quarter earnings.
Shares fell more than 2% in premarket trading, as it reiterated its fiscal 2022 forecast.

The pharmacy chain and health-care company administered more than 8 million Covid tests and more than 20 million Covid vaccines in the fourth quarter, a significant jump from the nearly 17 million vaccines administered in the second quarter, and the 11.6 million that it gave in the third.
CVS has played a key role in the country’s response to the pandemic, along with competitor Walgreens Boots Alliance. Covid-related services have led to a boost in its retail and pharmacy business over the past year, particularly during the holiday quarter when consumers sought out booster shots and at-home tests ahead of gatherings.
Here’s what the company reported for the three-month period ended Dec. 31, compared with what analysts were expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $1.98 adjusted vs. $1.93 expected
Revenue: $76.60 billion vs. $75.67 billion expected

Led by its new CEO Karen Lynch, CVS is expanding into more health-care services and pledging to use its scale to reduce costs and improve outcomes. The company is combining the different parts of its business: A huge national footprint of drugstores; its insurance business, Aetna; and pharmacy benefits manager, Caremark.
CVS reported fiscal fourth-quarter net income of $1.31 billion, or 99 cents per share, up from $973 million, or 74 cents per share, a year earlier.

The company said its net income from continuing operations was 98 cents. But it earned $1.98 per share, after adjustments, which was more than the $1.93 per share expected by analysts surveyed by Refinitiv.
CVS is overhauling its stores to match that health-care focus. Starting this spring, it plans to shutter about 900 locations – or 9% of the company’s roughly 10,000 U.S. stores – over the next three years.
The company’s operating income in the quarter dropped by nearly 12%, with much of that coming from a store impairment charge of about $1.4 billion as it wrote down leases for property and equipment to plan for those closures.
Total revenue for the period rose to $76.60 billion from $69.55 billion a year earlier, exceeding expectations of $75.67 billion.
Same-store sales at CVS rose by 13.4% in the fourth quarter. CVS said it saw higher prescription volumes, front-of-store sales and vaccinations at its stores during the latest period. It said it also benefited from the growth of specialty pharmacy.
Across CVS’ business segments, retail/long-term care revenue grew 12.7% to $27.11 billion, health care benefits revenue increased 8.4% to $20.7 billion and pharmacy services revenue rose 8.2% to $39.34 billion.
Covid vaccinations, diagnostic tests and sales of over-the-counter test kits accounted for about 40% of the increase in the retail segment’s revenue.
In the coming fiscal year, CVS said it expects earnings from continuing operations to range between $7.04 to $7.24 per share and adjusted earnings to range between $8.10 to $8.30 per share.
Shares of CVS are up 51% over the past 12 months and touched a 52-week high on Tuesday. Shares closed Tuesday at $110.83, up 1.3%. The company’s market value is $146.30 billion.
Read the company’s press release here.

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Last November, Nissan said it would invest billions of dollars over the next five years to speed up the electrification of its product line.
It is targeting a 50% electrification mix for its Nissan and Infiniti brands by the end of the decade.
The Japanese automotive giant is one of several well-known companies pursuing an electrification strategy.

The chief operating officer of Nissan on Tuesday explained that his company has decided to move away from the development of new internal combustion engines in Europe once a tougher set of emissions standards, known as Euro 7, come into force.
During an interview with CNBC’s “Squawk Box Europe,” Ashwani Gupta laid out some of the reasons behind the planned shift, a subject he has addressed a number of times in the past.

A key reason behind the decision, Gupta said, related to how competitive ICE cars would be following the introduction of Euro 7, given that new technology would have to be used for these vehicles to comply with regulations. Another factor to consider was whether customers would be willing to pay for the cost of such tech.
According to Brussels-headquartered campaign group Transport & Environment, it’s expected that Euro 7 standards will be implemented in 2025. From Gupta’s comments, it would appear Nissan has made its mind up on how the market will develop and European consumers will behave going forward.
“If the total cost of ownership of battery electric cars at Euro 7 is less than the total cost of ownership for the ICE cars,” he said, “[then] definitely, customers will go for battery cars. So that’s why we’ve decided not to develop ICE engines, starting [from] Euro 7, for Europe.”
Gupta was also keen to stress that the decision related to the development of new ICE engines, rather than those already in the market.

Read more about electric vehicles from CNBC Pro

The above remarks echo comments from Gupta during a question and answer session earlier in the day.

Nissan, he explained, believed customers would have to pay “much more” for an ICE car than an electrified one at the time of Euro 7’s introduction. “It’s not us who is deciding, it’s customers who will say that the electric car has more value than [an] … ICE car.”
Away from Europe, Gupta said the Japanese automotive giant would “continue to do ICE engines as far as it makes sense for the customer and for the business.”
Last November, Nissan said it would invest 2 trillion Japanese yen ($17.3 billion) over the next five years to speed up the electrification of its product line.
The company said it would aim to roll out 23 new electrified models by 2030, 15 of which will be fully electric. It is targeting a 50% electrification mix for its Nissan and Infiniti brands by the end of the decade.Nissan is one of several well-known companies pursuing an electrification strategy. In March 2021, Volvo Cars said it planned to become a “fully electric car company” by the year 2030. Elsewhere, BMW Group has said it wants fully electric vehicles to represent at least 50% of its deliveries by 2030.

Read more about clean energy from CNBC Pro

These moves come at a time when major economies around the world are attempting to reduce the environmental footprint of transportation.
The U.K., for example, wants to stop the sale of new diesel and gasoline cars and vans by 2030. It will require, from 2035, all new cars and vans to have zero tailpipe emissions.
Elsewhere, the European Commission, the EU’s executive arm, is targeting a 100% reduction in CO2 emissions from cars and vans by 2035.
Tuesday also saw Nissan report an operating profit of 191.3 billion yen, or roughly $1.65 billion, for the period between April and December 2021. Net income hit 201.3 billion yen in the first nine months of the fiscal year. More

Chipotle Mexican Grill topped Wall Street’s estimates for its fourth-quarter earnings and met its expectations for revenue.
The burrito chain is facing higher costs for labor and ingredients, but price hikes helped offset their impact.
The company said the omicron variant hurt sales in late December, and its impact accelerated in January.

Shares of Chipotle Mexican Grill jumped 8% in extended trading on Tuesday after the company reported quarterly earnings that topped analyst expectations.
Menu price hikes helped offset inflation without hurting customer demand. Other chains haven’t had as much luck charging customers more. Fellow restaurant giants McDonald’s and Starbucks both fell short of Wall Street’s earnings expectations for their latest quarters due to higher costs.

“We’re pretty fortunate with the pricing power that we have,” Chipotle CEO Brian Niccol said on CNBC’s “Closing Bell.”
Next quarter, the burrito chain expects same-store sales growth to slow due to the omicron variant.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $5.58 adjusted vs. $5.25 expected
Revenue: $1.96 billion vs. $1.96 billion expected

The company reported fourth-quarter net income of $133.48 million, or $4.69 per share, down from $190.96 million, or $6.69 per share, a year earlier. The company paid more for beef, avocados and freight during the quarter.
“Those things continue to stay elevated, and until we start to see some of these things pull back, we are probably will have to take some price,” Niccol said.

Its workers also earned higher wages. Niccol said the chain is back to pre-pandemic staffing levels.
Excluding legal expenses, closure costs and other items, Chipotle earned $5.58 per share, beating the $5.25 per share expected by analysts surveyed by Refinitiv.
Net sales rose 22% to $1.96 billion, meeting expectations. Same-store sales climbed 15.2%, surpassing StreetAccount estimates of 14.8%. Chipotle credited menu price hikes, strong online sales and demand for its limited-time smoked brisket for its sales growth in the quarter.
To date, Chipotle has raised menu prices by 6% in 2022, according to Niccol. Compared with a year ago, customers are paying about 10% more for their orders. Niccol told CNBC’s Sara Eisen that the chain hasn’t seen any resistance to higher prices yet from customers.
Digital sales ticked up 3.8%, accounting for 41.6% of the company’s sales during the quarter. Chipotle has more than 26.5 million members in its loyalty program, which is meant to encourage customers to order online.
In the back half of December, the chain started seeing an impact on sales from the omicron variant, a trend that accelerated in January. The first month of the year also included winter storms that hurt demand in some regions.
Looking to next quarter, Chipotle is forecasting same-store sales growth in the mid- to high-single digits. Analysts are expecting same-store sales to rise 8.9% during the first three months of the year, according to StreetAccount estimates.
For 2022, Chipotle is forecasting between 235 to 250 new restaurant openings, assuming permitting and construction delays due to the pandemic don’t worsen. It opened 78 new locations in the fourth quarter.
The company also expanded its long-term prediction for its North American footprint from 6,000 restaurants to 7,000 locations. Niccol said on the conference call that the change to its goal comes from locations in smaller towns, which are often operating at better margins than its traditional urban or suburban restaurants.
By 2023, Chipotle believes it can accelerate its pace of new units to a range of 8% to 10% a year, citing improving cash-on-cash returns. More than 80% of the new restaurants will include “Chipotlanes,” the drive-thru lanes dedicated to picking up only digital orders.
The company didn’t share an outlook for its full-year earnings or revenue. CFO Jack Hartung said the pandemic and labor situation made it too difficult to share a 2022 forecast.
Read the full earnings report here.

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