Taco Bell Cyclospora Outbreak Impacts Yum! Brands' Financials
A cyclospora outbreak linked to Taco Bell's shredded iceberg lettuce caused a significant drop in sales and foot traffic during July, impacting parent company Yum! Brands (YUM). The Centers for Disease Control and Prevention reported over 1,900 illnesses across nine states. Despite the initial market concern reminiscent of Chipotle’s E. coli crisis in 2015, Yum! Brands' stock rose after strong second-quarter earnings were released on July 30. The company's adjusted earnings per share beat expectations at $1.62 for Q2, with revenue reaching $2.17 billion—just shy of forecasts. The results predated the outbreak and showed a healthy Taco Bell before the crisis hit. On its earnings call, management indicated that sales had started to recover by late July. CEO Chris Turner described the impact as temporary, noting U.S. same-store sales for Taco Bell fell 2% in early July but improved afterward.
Topics: food safety public health restaurant industry stock performance