February 10, 2023
Taco Bell reported stellar growth in 2022—a that feat executives said was achieved thanks in part to the A-list star of the fast-food chain’s recent commercials, reports Fortune Magazine.
Yum! Brands’ fourth quarter earnings beat Wall Street’s expectations when they were published on Wednesday, February 8; with a strong performance from Taco Bell offsetting slower growth at the company’s Pizza Hut and KFC divisions. The chain reported same-store annual sales growth of 11%, coming in way above analysts’ estimates of a 6.8% increase.
In the United States, Taco Bell’s sales grew 14% in the fourth quarter, which executives attributed to menu variety as well as a not-so-secret weapon: comedian Pete Davidson.
Davidson starred in a breakfast campaign for Taco Bell that was rolled out toward the end of last year, which saw the Saturday Night Live alum apologize for items that had featured on fast food chain’s breakfast menu in the past—like its naked egg and waffle tacos.
The commercial saw Taco Bell pledge to keep its breakfast menu simple.
At the height of the pandemic in 2020, Taco Bell’s breakfast revenues took a hit when demand plummeted and a number of the chain’s U.S. outlets temporarily stopped opening before lunch. However, morning sales in Taco Bell stores across America staged a major comeback last year.
In the final three months of the year—as Davidson’s ads were aired—breakfast sales grew 9%, executives said in an earnings call on Wednesday.
David Gibbs, Yum’s CEO, described 2022 as a “landmark year” for the company, noting “encouraging progress” on the Taco Bell breakfast front.
“Building on high-profile partnerships such as Doja Cat and Davante Adams, Taco Bell brought in Pete Davidson to help drive consumer buzz for breakfast,” Gibbs said in Wednesday’s call. “This led to 9% transaction growth [on breakfast items].”
Rapper Doja Cat and NFL star Davante Adams both appeared in Taco Bell ads earlier on in 2022.
Gibbs added that Taco Bell’s “cult classic” menu item the Mexican pizza helped lift the chain’s sales—telling investors on the call that 45 million units were sold, which he said was “impressive considering it was only available for four months of the year.”
With elevated inflation persisting throughout 2022, Gibbs also noted that Taco Bell was able to target both high-end and value-seeking customers, thanks to its premium products like the grilled cheese burrito and its budget-friendly items like nacho fries.
Research contact: @FortuneMagazine