Nacho Fries help offset Yum Brands’ slowdown

Overall sales far below Wall Street analysts’ growth expectations

NEW YORK— Taco Bell’s new Nacho Fries were a hit with diners, with a quarter of all orders including the $1 (U.S.) spicy fries since they became available earlier this year. Still, sales growth at its parent company Yum Brands was weaker than expected, hurt by a chicken shortage at KFC chain restaurants in the U.K. and Ireland.

The company’s shares fell more than 5 per cent.

Overall sales rose 1 per cent at Yum’s established restaurants worldwide in the first quarter, far below the 1.9-per-cent growth Wall Street analysts expected. Yum said the figure would have risen 2 per cent if it weren’t for the KFC issues.

The fried chicken chain had to temporarily close most of its 900 stores in the U.K. and Ireland in February after delivery delays let to a chicken shortage. Sales rose 2 per cent at established KFC stores.

Taco Bell sales rose 1 per cent at established stores. It kept the limited-time Nacho Fries on the menu longer than it expected when it realized it was a hit. It sold 53 million Nacho Fries in its first five weeks on the menu, the company said.

Sales also rose 1 per cent at established Pizza Hut restaurants. Yum is working to revive the brand as it faces increased competition from Domino’s Pizza. It is topping pizzas with more cheese and hiring drivers to make more deliveries, Yum CEO Greg Creed said.

Yum’s other first-quarter financial results beat Wall Street expectations.