LOUISVILLE — Fast-food restaurant operator Yum Brands is bracing for another round of sluggish U.S. sales late this year but predicted a turnaround at Taco Bell next year with the planned launch of new products to reinvigorate the slumping brand.
Yum Chief Financial Officer Rick Carucci told industry analysts Wednesday that the Louisville-based owner of Pizza Hut, Taco Bell and KFC expected another sales drop in the fourth quarter in its struggling U.S. sales.
The company on Tuesday reported across-the-board sales declines in the United States but said its third-quarter profit grew thanks to strong sales and restaurant growth in China and elsewhere overseas.
While the international business has thrived, the struggles in the United States remain a concern for Yum.
"We know that we need to turn around our U.S. business," Carucci said.
Taco Bell accounts for about 60 percent of Yum's slumping U.S. profit, but the chain is struggling to overcome publicity from a lawsuit earlier this year that claimed the filling in its tacos and burritos didn't contain enough beef to be called that. The highly publicized suit was later dropped.
The Mexican-style restaurant chain reported a 2 percent drop in third-quarter revenue at its U.S. restaurants open at least a year, an improvement from a 5 percent second-quarter decline.
"Taco Bell is making steady improvement, but it's slow improvement," Yum chairman and CEO David C. Novak said. "We're obviously not pleased with our same-store sales."
Yum said it is pinning hopes for a rebound on new products that Taco Bell plans to start introducing late in the first quarter next year. Novak said the chain would be "reinventing the taco."
He predicted the menu items will provide "a significant uplift in our business."