1) Strategic Overview and Leadership Changes - Yum! Brands is navigating a public health issue in the U.S., prioritizing consumer safety and trust. - The company completed a strategic review of Pizza Hut, entering agreements to sell it to LongRange Capital and Yum China, which is expected to strengthen both Yum! and Pizza Hut. - Leadership transition announced with Tracy Skeans retiring and Nai De Leon stepping in as Chief People and Culture Officer.

2) Financial Performance and Segment Results - Excluding Pizza Hut, Q2 2026 system sales grew by 7%, with 6% unit growth and 4% same-store sales growth. - Digital sales reached nearly $9 billion, with a digital mix of 61% across brands, showing a significant increase year-over-year. - KFC contributed 58% to divisional operating profit, achieving 6% system sales growth and 2% same-store sales growth. - Taco Bell represented 43% of divisional operating profit, with 7% same-store sales growth and a digital sales mix of 47%.

3) Challenges and Headwinds - Taco Bell faced a temporary sales impact due to an industry-wide food safety issue, with same-store sales down 2% quarter-to-date through July 27. - The peak impact occurred around July 18, but sales trends have shown improvement since then. - The company is focused on restoring consumer confidence and sales momentum through promotions and loyalty initiatives.

4) Operational Plans and Future Growth Strategies - KFC is modernizing its brand and menu, focusing on boneless chicken and expanding its sauce offerings, with aspirations to implement these changes globally by the end of 2027. - Taco Bell is enhancing its digital capabilities with a redesigned app and expanding its loyalty program to deepen consumer relationships. - The company is investing in AI technology (Byte) to streamline operations and improve customer experiences across all brands. - Yum! anticipates strong development opportunities, particularly in emerging markets for KFC, with a significant potential for unit expansion.

5) Guidance and Outlook - Yum! is confident in achieving or exceeding its financial targets for the full year, despite recent challenges faced by Taco Bell. - The company expects Taco Bell's third-quarter equity store level margins to range between 19% and 21%. - The upcoming Q3 earnings call is scheduled for November 3, where further updates will be provided.

Bottom line: Yum! Brands is positioned for long-term growth despite short-term challenges, with strategic sales of Pizza Hut enhancing focus on core brands, strong digital sales growth, and a commitment to operational excellence and consumer trust.