Thanks, operator. Good morning, everyone, and thank you for joining us.

On our call today are David Gibbs, our CEO; Chris Turner, our CFO; and Dave Russell, our Senior Vice President and Corporate Controller. Following remarks from David and Chris will open the call to questions.

Before we get started, please note that this call includes forward-looking statements that are subject to future events and uncertainties that could cause our actual results to differ materially on these statements. All forward-looking statements are made only as of the date of this call and should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC.

In addition, please refer to our earnings release and relevant sections of our filings with the SEC to find disclosures, definitions and reconciliations of non-GAAP financial measures and other metrics used on today's call. Please note that during today's call all system sales growth and operating profit growth results exclude the impact of foreign currency.

For more information on our reporting calendar for each market, please visit the financial reports section of our website. We are broadcasting this conference call via our website.

This call is also being recorded and will be available for playback. Looking ahead, our first quarter earnings will be released on February 7th with a conference call on the same day.

Now, I like to turn the call over to David Gibbs.

Thank you, Matt, and good morning, everyone. Before I go over our third quarter results, I'd like to express our deep concern for those affected by the ongoing violence in Israel and Gaza.

The safety of our people in the region is our utmost priority and in addition to staying in close contact with our local team members and franchisees, our franchise restaurants in the region are only open when it is safe for staff and customers. The Yum!

is supporting affected employees and contributing to humanitarian organizations that are providing critical aid. Our heartfelt wishes for the safety and well-being of innocent civilians and families in the region impacted by this conflict.

Turning to our third quarter results, which once again reflect our ability to grow our iconic brands globally through our recipe for good growth. I'm proud to share that we delivered 10% system sales growth, led by 6% same store sales growth and 6% unit growth.

We set a Q3 record on unit development, opening an incredible 1,130 gross new units in the quarter. Our digital sales growth remains on fire, with sales up more than 20% year-over-year and digital sales setting a record by exceeding $7 billion.

Our third quarter core operating profit grew an impressive 16%. KFC International and Taco Bell US, which collectively contribute approximately 80% of our divisional operating profit, fueled this quarter's growth.

Together, these twin growth engines delivered a remarkable 13% system sales growth in the quarter. KFC International has the most units among quick service restaurants in 60 countries and has been adding more absolute units than any other retail brand in the world since 2021.

Of course, Taco Bell US is in a class of its own in the domestic QSR category as a culturally iconic brand and clear leader in value perception with the most crave-worthy food in the industry. Taco Bell has unmatched menu flexibility, exceptional pricing power, industry-leading unit economics, and world-class franchise partners.

Both businesses are performing at extremely high levels and have ambitious plans to accelerate their growth to even greater heights. Now let me discuss the quarter's results in greater detail through the lens of two of our growth drivers, relevant, easy, and distinctive, or Red Brands, and unrivaled culture and talent.

Red Brands are the cornerstone of our strategy and the way we bring this to life continues to evolve as consumers' behaviors shift and new trends are established. Over the past quarter, we've made significant progress in three specific initiatives: building sales layers through new category entry points; leveraging technology to drive brand loyalty; and delivering exciting value offers to broaden appeal.

Our brand teams are galvanized around these three focus areas, and we are highly encouraged by the results these areas are driving in our divisions, which I will now highlight. Starting with the KFC division, which grew system sales 12% this quarter, driven by 8% unit growth and 6% same-store sales growth.

While much of KFC's recent momentum has been led by emerging markets, this quarter we saw a broad-based strength across a more diverse group of geographies, further proof of our ability to win in any macro environment. A few markets with standout same-store sales growth performance include Africa at 9% growth, Australia with 9% growth, and Latin America and Caribbean at 8%.

KFC's hand-breaded original recipe nuggets are a global innovation platform and represent a new category entry point to attract individuals and families. After a successful launch in the US, we expanded nuggets to our Latin America and Caribbean market this quarter and saw incredible consumer reception that helped drive significant sales.

The team plans to expand the offering to several more places around the world. KFC Africa delivered their 11th consecutive quarter of same store sales growth with a combination of abundant value offers, strong e-commerce sales, and the relaunch of their breakfast campaign driving this quarter's performance.

Finally, I want to highlight our KFC Australia business as they continue to deliver fantastic performance with kiosk sales growing more than 90% compared to last year and the advent of a highly personalized value campaign that drove significant own channel sales. The KFC Global team is also making great progress in expanding its loyalty program around the world, including in the US, where we soon expect to launch KFC Rewards.

Next I'll discuss our Taco Bell division, which delivered 11% system sales growth in Q3, led by 8% same-store sales growth and 5% unit growth. At Taco Bell US, system sales grew 11% with an impressive 8% same-store sales growth and 3% unit growth.

The Taco Bell team leveraged its magic formula that encompasses a balanced set of commercial strategies including building brand buzz, unparalleled value, mass occasions, and digital initiatives to grow transactions during the quarter. They delivered unparalleled value with the return of fan favorites like the $5 box, an amazing platform at a compelling price point.

Though Taco Bell featured a great value promotion in the quarter, value purchases remained within range of the brand's intended 10% mix target. This, combined with exciting innovation and brand buzz, helped the brand maintain its industry-leading margins of 24%.

A key component of the magic formula is mass occasions, the brand's personal expression of building new category entry points. One such example is the growth in chicken offerings, which the team plans to further expand with the launch of its Cantina menu.

We're excited about the impact these new menu items will have as we roll out these offerings in 2024. Another component of this brand success is digital, which includes loyalty.

While a Taco Bell loyalty customer already spends 40% more per year than a traditional customer, the consumer feedback we've received indicates that we can do an even better job at creating more obvious and exciting ways to both earn and redeem rewards. Starting next year, Taco Bell will enhance its loyalty program and provide easier access across channels to earn and redeem points.

Additionally, members will enjoy more exclusive experiences, including more digital innovation, early access to new products, and loyalty-enabled experiences. Eventually, the team will integrate its loyalty program with digital menu boards to create an even more personalized experience.

Taco Bell International delivered 16% system sales growth driven by 23% unit growth and 1% same store sales growth. A key contributor to Taco Bell's International business has been robust digital sales, which increased nearly 45% year-over-year this quarter.

The Global Taco Tuesday campaign that launched in June continued to drive customer engagement around the globe, bringing greater brand awareness and equity with consumers. The international markets are focused on amplifying National Taco Day and providing consumers with both craveable food and everyday value.

Turning to the pizza division, which grew system sales 4% driven by 4% unit growth and 1% same store sales growth. International same store sales grew 2%, driven by transaction growth in China, continued momentum in melts, and more strategically activating aggregator partnerships in international markets.

Same store sales results in the US were flat as Pizza Hut leaned into its long-term strategy to build new category entry points through individual meal occasions with products like melts and wings. This quarter, Pizza Hut US teamed up with the Teenage Mutant Ninja Turtles to relaunch our Big New Yorker Pizza and deliver pizzas into the New York City subway stations, leading to over 1 billion media impressions.

As we head into the fourth quarter, the Pizza Hut US team launched a late night initiative, strategically expanding operating hours in more than 1,000 restaurants to give consumers even more ways to access the brand. To wrap up with the Habit Burger Grill, system sales grew 4%, driven by 8% unit growth.

The new Habit leadership team is settling in well and has placed a distinct focus on building strong unit level economics to set the brand up for long-term success. Of note, the team is developing a new cost-effective packaging range designed for off-premise occasions along with a new prototype store to optimize CapEx and pre-opening costs.

The habit is set to launch its first everyday value platform in November called Simple Crafts after a successful test this quarter. We have tremendous confidence in the long-term prospects of this brand and are encouraged by the improvements that the team is making to deliver success in the future.

Now, I'll turn to our good growth strategy, starting with our people pillar. We've held powerful forums this quarter supporting our unrivaled culture and talent growth driver, including a leadership development conference for underrepresented talent and a new program aimed at preparing high potential female talent to be part of the next generation of senior leadership.

In addition, we're furthering our culture of collaboration and building capability across our company. Recently, a cross-brand group of leaders gathered for the first Red innovation experience in our innovation lab, where they learned design thinking and real-time problem-solving through new age innovation techniques.

We're also making a meaningful impact in the communities we serve through our global unlocking opportunity initiative to create more equality. For example, in the UK, KFC partnered with a nonprofit with the goal of having one-third of its new hires be at-risk use.

In Sri Lanka, Pizza Hut is investing in the development of 30 vocational and technical training facilities to prepare youth for careers in the QSR industry. In terms of our planet pillar and our focus on reducing greenhouse gas emissions, we're educating suppliers through the supplier leadership and climate transition, a consortium of multinational companies created to accelerate climate action in the supply chain.

Many of Yum!' s poultry, beef and dairy suppliers in key markets have joined this program or already have emissions reduction goals.

These are just a few of the examples of the great work of our teams, earning us recognition like Newsweek's 2023 America's Greenest Companies. Overall, we're incredibly pleased with our results for the quarter and year to date.

Our strategy is clear and the emphasis we are placing on building sales layers through new category entry points, leveraging technology to drive brand loyalty, and delivering exciting value offers to broaden appeal is going to drive our business forward even faster. As we conclude our internal annual operating plan reviews and look forward to 2024, it's clear we have the very best teams in place and are perfectly set up to capture an even greater share of a growing global QSR market and deliver compelling shareholder value going forward.

With that, Chris, over to you.

Thank you, David, and good morning, everyone. Today, I'll discuss our financial results, our bold restaurant development, and unmatched operating capability growth drivers, followed by an update on our balance sheet and capital strategy.

I'll begin by discussing our strong results for Q3. We achieved 10% system sales growth, driven by 6% same store sales growth and 6% unit growth.

Our digital sales channels continue to grow with digital sales setting another record this quarter, exceeding $7 billion, an increase of more than 20% year-over-year. Core operating profit grew an impressive 16%.

Taco Bell delivered another quarter of exceptional performance, achieving 24% restaurant-level margins, while simultaneously driving transaction growth. Global ex-special general and administrative expenses were $263 million, lower than expected, in part, due to timing, with some expenses shifting into the fourth quarter.

Our ex-special tax rate of 19% was lower year-over-year. Lastly, our EPS excluding special items, was $1.44 per share.

Ex-Special EPS was positively impacted by $0.05 of unrealized investment gains related to our investment in Devyani. I'd now like to give a little bit of color on the remainder of the year.

We're proud to say that we continue to expect that our results will land well above our long-term growth algorithm for the full year, including achieving low double-digit core operating profit growth. On the fourth quarter specifically, we now expect an operating loss at Habit of approximately $10 million, largely driven by restaurant asset impairment charges, which will be higher than we had initially expected due to anticipated impacts from the California Assembly Bill 1228 previously referred to as the FAST Act.

Even with the previously mentioned timing shift of G&A expenses, we still expect fourth-quarter G&A to be slightly lower year-over-year. Moving to reported operating profit, we now expect foreign currency translation to represent a $45 million to $55 million headwind on a full year basis.

Finally, we expect our ex-special full year tax rate to land at approximately 20%. Next, I'll cover our bold restaurant development growth driver.

We are on track to finish 2023 with net new unit development similar to the record-breaking performances of the last two years. This quarter's 6% growth in unit count, led by a Q3 record of 1,130 gross new openings across 65 countries, reflects the continued success of our multi-year effort to accelerate development across our brands.

By now, you've seen the announcement at Yum! China's recent investor conference raising their unit growth expectations for our brands in China.

This announcement highlights continued strong returns on new restaurant development in our brands, in combination with the best in class development capabilities that Yum! China's leadership team have built in the market.

More broadly, we continue to see excitement for our brands all around the world. As an example, in Vietnam, a market with a high population, but relatively low Yum!

restaurant penetration, our unit count increased by over 40 units versus last year, reflecting 16% growth. In total this quarter, KFC achieved 8% unit growth, including 664 gross new units, a Q3 record for the brand.

This was led by Yum! China, along with our franchisees in India, Sapphire and Devyani, and IS Holdings in Turkey.

At Pizza Hut, we opened 383 gross new units with more than 30 markets contributing to this growth. Our Taco Bell division opened 74 gross new units led by the US, China, and India.

In the midst of a higher interest rate environment, our world-class 3C franchise partners are stepping up and investing to grow share. One of those exceptional franchisees is the [Serrano] (ph) Group, our partner for KFC in multiple countries in Latin America.

In just the past three years, the Serrano Group has opened over 100 net new units, quadrupling their store count from the past 10 years and building world-class assets that reflect how dynamic and tech-forward our brand is in this region. Building a network of growth-minded franchise partners is no easy task.

It requires persistent effort to identify and engage with like-minded partners to consistently deliver on brand standards, growth ambitions, and mutually shared financial objectives, all of which add up to long-term profitable growth for all parties and a competitive advantage for our brands. While we focus on having the right partners, we also work to ensure we have the right restaurant formats and economic models in place.

All of our brands are laser-focused on delivering industry-leading franchisee returns by continuously optimizing new store CapEx, as well as maintaining a flexible portfolio of formats that meet the unique needs of each trade zone in which we operate. Taco Bell's newest small box design, GoMobile 2.0, now open in El Paso, Texas, builds on the original GoMobile concept.

This new design leverages digital capabilities to create more touch points for consumers to order and pick up in a seamless manner. Moving on to our unmatched operating capability growth driver, we continue to focus on delivering a seamless digital experience for our consumers, enabling easier operations for our team members and harnessing our expansive data to make fast and informed decisions.

We frame up this approach through three lenses: easy experiences; easy operations; and easy insights. Within easy experiences, we successfully rolled out the Yum!

Commerce platform to the Taco Bell system last quarter and are in the process of rolling the platform out to the Pizza Hut US system. Transitioning our brands onto Yum!

own platforms allows us to scale new capabilities at a rapid pace and build out an ecosystem of proprietary platforms that are designed to work together in a secure and seamless fashion. Our primary focus is to deliver leading edge capabilities to our franchisees with advantaged economics.

And our franchisees continue to co-invest with us as we develop and roll out our solutions. One exciting area of growth is the implementation of in-store kiosks.

We now have kiosks in nearly 40% of KFC stores outside of China, all of our Taco Bell US locations, excluding licensed stores, and almost 70% of our Habit locations. Looking forward for our KFC stores outside of China, we expect to drive a 20-point increase in our kiosk penetration next year on the way to reaching the vast majority of stores by the end of 2026.

Kiosks not only drive a higher check compared to our traditional front counter, but also drive higher margins through operational efficiencies and generate new opportunities to leverage customer data and create personalized ordering experiences. Within easy operations, we're on track to have our recommended ordering technology, which we're calling AIM, or Automated Inventory Management, rolled out across our KFC US system by year end.

As a reminder, this is an in-house developed AI module that predicts and suggests the quantity of each product a restaurant general manager should order. We now have AIM in place at over 7,000 U.S.

Restaurants, including 2,700 KFC US Restaurants added over the past quarter. There is also great momentum behind the Dragontail rollout.

We have deployed Dragontail, an AI-driven production and delivery sequencing platform to nearly 1,400 Pizza Hut US stores as of the end of the quarter and are on track to have Dragontail deployed to around 8,000 restaurants globally by year end. Further proof of our unique ability to scale Yum!

own technologies around the world. We have made significant progress in 2023, building, testing, and refining our proprietary technology platforms.

In 2024, we will further scale these platforms and continue to realize the value of our owned tech ecosystem. Finally, we are excited about the new technologies.

Our Red innovation team is in the early stages of piloting in restaurants to support our franchisees and free up team member time to allow them to focus even more on delivering world-class customer experiences. First, we are testing a voice-enabled AI drive-through platform in a couple of our restaurants in California that elevates the drive-through experience, increases speed, productivity and efficiencies, and generates automated upsell recommendations.

Second, we have developed a proprietary automated drinks fulfillment system that frees up team member time and increases drive-through speed and accuracy. We've designed these technologies to integrate seamlessly with our proprietary Poseidon point of sale platform and we look forward to continuing to test, refine, and pilot these capabilities.

Wrapping up with our easy insights pillar, I'm very excited by the progress we have made in building the infrastructure and engineering capabilities required to harness the power of our global data assets. We continue to expand the Yum!

global data hub, which captures the vast majority of global transaction level sales data and other key operational and customer metrics. We believe this centralized hub is a key asset and differentiator for Yum!

as we develop leading AI capabilities. In 2024, our easy Insights team will develop and test new AI-driven capabilities that pull from the global data hub and integrate into our own technology platforms.

Some examples of these AI-driven capabilities include personalized upsell recommendations for customers ordering on our digital platforms, intelligent menu pricing recommendations, and dynamic restaurant routines for restaurant general managers. Finally, we will begin activating our US cross-brand customer data platform in Q4 and throughout 2024.

This cross-brand platform gives us unprecedented visibility into the ordering behaviors of millions of customers across our four brands, and will also be a breakthrough source of learnings for Collider, the high-impact, boutique, insights consultancy that we acquired in 2015. Lastly, I'll provide an update on our balance sheet and capital strategy.

As a reminder, our capital priorities remain unchanged. Invest in the business for the long term, maintain a resilient balance sheet, pay a competitive dividend, and maximize shareholder value by returning excess capital through debt paydowns and share repurchases.

Net capital expenditures for the quarter were $31 million, reflecting $57 million in gross CapEx and $26 million in refranchising proceeds. Our net leverage ratio ended the quarter at 4.4 times.

Furthermore, our current outstanding debt has a weighted average maturity of six years, and our greater than 90% fixed debt ratio remains highly attractive in the current market environment. To wrap up, we're very proud of the results in this quarter.

We are on a clear path to achieving double-digit core operating profit growth for the full year. We continue to strengthen our position as the global franchisor of choice, a testament to the success of our business strategies and industry-leading talent.

We're proud of our incredible continued momentum on unit development and are excited as we further accelerate our tech deployments and AI initiatives to meet the demands of consumers both today and tomorrow. With that, operator, we are ready to take any questions.

Hi. Good morning.

David, my question is on the broader consumer spending backdrop that you're seeing. I'm just wondering if you could maybe comment on some of your major markets and what you're seeing, I guess, exiting the third quarter as we've seen some signs that the environment is going to get a bit more challenging in places like the U.S.

and in China? So just wondering if you could opine on what's happening with the consumer and also talk about what, if anything, you're changing in your strategy to address that?

Thanks.

Yes. Thanks, David.

I guess, I would start by saying, if you haven't picked up on it, this is our fifth consecutive quarter of double-digit system sales growth globally. So when you think about the consumer and what we're seeing in our business, obviously, it's a pretty good trading environment for us, and that momentum continued into Q3.

And I'll also share that, that momentum is continuing into Q4. So now, part of that is the way that we're managing through some of the consumer pressures around the world.

And certainly, you talked about China having their challenges. But there's challenges in every market.

The UK, for example, we've got a lot of consumers faced with variable rate mortgages that's pressuring them. So our local UK team has put in place a program to have a Twister of the Day for GBP1.98, which is really resonating with consumers.

And they're having in the midst of a good strong year in the UK. In Latin America and Caribbean, I was just down in that market with our great franchisee [Juan Carlo Serrano] (ph), visiting our stores in Colombia and Chile, looking at a new model that they've developed using a commissary which really improves the efficiency of our stores and the quality of product to allow us to provide even more value to customers in a pressured consumer environment.

So certainly, there are pressures out there, but our franchisees, I think, do a better job than most by far, of navigating those pressures. I know what's on a lot of people's minds is what's going on in the US.

It's well documented that there is more pressure on the US consumers doing loan payments coming due. And certainly, our industry has softened a little bit, but the industry is doing better than most industries, if you look at any of the industry-specific data.

For us, though, the US is a much more favorable situation because Taco Bell is the majority of our sales and profits in the US. You saw the great results we put up for Taco Bell in the US this quarter.

On a one and two year basis, sales accelerated in Q3. But really importantly, and this wasn't in the prepared remarks, I know you'll find it of interest, if we break down the Taco Bell stores in the United States by income demographic, we see really consistent 2% to 3% transaction growth across all income levels.

So our stores in lower-income trade areas are performing well with good transaction growth, just like our stores in high-income trade areas. I think that speaks to the way Taco Bell can play value with things like the $5 box.

And how also in a pressured consumer environment, we're probably benefiting a little bit from some trade down in those higher income trade areas. So, our lens on the consumer is obviously biased, but we're putting up strong results.

We're seeing plenty of demand and we, once again, I think, are demonstrating we can thrive in any environment.

Hi. Thank you very much.

Obviously, you continue to talk about the Yum! owned proprietary technology platforms, which really are geared for making it easier for franchisees to run stores and, of course, more profitable as well.

And over years, I mean, certainly, you're doing much more of that, not less. And the rollouts are continuing, and I imagine new programs will be developed in the future.

Can you kind of talk about maybe the context of Yum! as a technology services provider.

And should we, in our models, longer term, start to think something like percentage of franchise system sales that you can actually earn as this technology service provider for your franchisees?

Yes. Hi, John.

Look, our Yum! technology strategy, which we reengineered in 2018 and launched in 2019 has driven tremendous results in the system.

We were at roughly $12 billion in digital sales in 2019. We'll be close to $30 billion this year, just tremendous growth.

And we like everything about those digital sales dollars. Our customers, they have higher checks, higher frequency whenever we transition sales to digital, plus we get all of the benefits in terms of more efficient operations, which help our franchisees sustain strong unit economics.

So the primary focus of all that is to drive profitable growth for Yum! and our franchisees.

And of course, our top priority there is to give our franchisees leading-edge tech capabilities with advantaged economics. That's what we're focused on doing.

Now we have invested ahead of that. I think we shared at the Investor Day in December that over the last three years, we've shifted an incremental 10 points of G&A toward digital and technology.

So we've made investments. We've continued to do that.

But as we implement, and you see this fast pace of implementations continuing to accelerate, franchisees do share in those investments in the form of fees tied to those technologies. Of course, they do that because they see benefits flow to their bottom line.

The business case on these technologies are strong. As we collect more and more of those fees, that will alleviate some of the P&L burden of the technology investments.

We're not going to provide forecasts on how we see that playing out, but that will be one dynamic in the P&L.

Thanks. As maybe a follow-up to that, and then I have a primary question, maybe you could give a feeling of what from here you think will be the biggest lifts from perhaps a technology hub that you talked about, quantify perhaps some areas where you think in 2024 and beyond, we'll see the biggest help to comps or franchisee margins.

And I just wonder also on Taco Bell, you mentioned a new loyalty relaunch. I think that, that brand, a lot of people would think would be in a great position to gain share and perhaps in accelerating degree in 2024.

Do you agree with that? And then if that were to happen, what would be the biggest reasons for that?

You mentioned loyalty, but perhaps there's some other things in the hopper. In the past, you talked about lunch being an area that you wanted to win in.

So I just wanted to discuss a little bit about Taco Bell. Thanks.

Yes. Let me share some thoughts on technology to start, and then we'll shift over to Taco Bell.

So on the broader technology program. As I mentioned, we like everything about those digital sales dollars as we continue to grow the digital business.

We made tremendous progress. But as we've also said, I still feel like we're in the early innings of getting maximum impact out of the broader digital strategy.

Of course, it goes across easy experiences, easy operations, easy insights, and we're still in the early days of bringing all of those elements together in common stores. And we really think there'll be a multiplicative effect as we implement more and more of these technologies together.

If I just took, for example, the labor productivity benefits, helping our team members make their jobs easier in the stores, focus more of their time on customers and help our franchisees drive productivity, as you bring more of these elements together, you're able to take advantage of more of those productivity benefits. So as we start to layer the Poseidon POS, which makes running the front end easier, as we continue to take digital sales higher, which reduces the workload burden on taking orders and taking payments, you get higher accuracy on order taking, which reduces some of the rework and back of house.

And then you bring on things that we mentioned earlier, voice AI at the drive-thru, fizz automation in terms of automated drink fulfillment, which works with the Poseidon POS, you really start to see a vision for the future where you've got a really great customer experience that you're delivering with high productivity for the franchisees. So we expect on this to continue to build and build.

If we go to Taco Bell, you mentioned the loyalty program. Loyalty, more broadly, across our brands is a key focus area.

We've been at north of 50% of all of our stores around the globe as part of a loyalty program, and that is continuing to grow. We've now implemented in the Middle East.

KFC US is coming on later this year, and we continue to refine the way our loyalty programs work. You mentioned Taco Bell.

They are now starting to really leverage the insights that we've generated from the early days of that program to refine the program over time. And we've implemented the Red 360, which is the first time we're bringing together insights across our brands in the US.

So that will be a driver of Taco Bell growth. More broadly, on the strategy, as you mentioned, category entry points or use occasions is a big focus.

We think there's a massive opportunity at lunch. We continue to focus on breakfast.

You've probably seen the ads recently during sporting events. So all of those are part of the bright future ahead for Taco Bell.

Great. Thanks.

Another Taco Bell question. Obviously, very encouraging 3Q performance and commentary about the start of 4Q.

I was hoping you could elaborate on the Cantina menu coming in 2024. I recall this menu item driving success in 2012, but was more upscale compared to US consumer that you guys noted is increasingly seeking value today.

So, can you help just us better understand the difference between the upcoming menu versus the one launched a decade ago?

Sure. Look, I think one thing Taco Bell does incredibly well in the industry is constantly change and evolve to consumers taste.

I wouldn't draw an exact parallel to the past Cantina menu. This is more about the chicken Cantina menu or Cantina chicken in terms of what that protein can do for us and launching a different version of our chicken.

So I think the team's excited about the impact they can have. But there's lots of reasons to be excited about what Taco Bell is doing in 2024.

As Chris mentioned, all the impact that the tech can have, the insights we're going to glean from data. Taco Tuesday, now that we've established that in the way that we can leverage that going forward.

The momentum we're getting in breakfast, what we can do with loyalty. The business is, obviously, somewhat on a roll.

If you look at the results from the last quarter, and I mentioned those trends are continuing. And so much of that gets right back to the great talent that we have at Taco Bell.

Sean Tresvant is taking over and he's got a great team in place and if you've seen the actual detailed plans for next year, you'd be as excited as I am. I obviously, not going to share a lot of the proprietary stuff.

But things line up well for a strong 2024 for Taco Bell.

Hi. Thanks.

Another one on Taco Bell, but this one is just specific to the international business. At the Investor Day last year, you shared a goal to get to 2,500 locations as quickly as you can.

Related to that, as we look out over the next year, what kind of annual case do you think you can get to from a gross openings perspective? And then if you could just comment on the opportunity for Taco Bell in China, specifically, may be your level of optimism there, that would be great to hear your current thinking.

Yes. Obviously, Taco Bell International is an exciting part of the growth equation for Yum!.

We don't provide brand-by-brand development targets, and so we're not going to waver from that. But you know our overall development goals are incredibly ambitious, opening up a new unit every other hour around the world.

And as you can see from this quarter that we set a record on development this quarter. As far as Taco Bell in the various markets around the world.

Yes, I just got back from a trip to Spain, where I spent some time with our great franchisee in Spain, one of the early adopters of Taco Bell that got to scale quicker than other mark. And you can see, he's done an amazing job of building a moat around the business and creating a differentiated brand much like in the US and now they're reaping the benefits from that and have very aggressive expansion.

But when any time you're taking a brand global that's been traditionally a US brand, you're going to -- it's not going to be an even path all the way to the top. There's going to be ups and downs, some market take off, other markets take a pause.

So I think in aggregate, we're very excited about the opportunity for Taco Bell around the world. We think it can be a meaningful growth driver in our equation long term.

But we're going to make sure that everywhere we go, we're helping our franchisees build the brand the right way, take whatever time that takes, like we did in Spain and the UK to establish the brand in a way that ensures its long-term success.

Great. Thanks for taking the question.

Just curious, either David or Chris, perhaps you could shed some light on what you think could happen with the NLRB recent joint employer ruling? It's set to go into effect on 12/26 of this year.

And curious to know what your thoughts are, whether or not it does go into effect and how it might impact the relationship between franchisee-franchisor in the US over time and potential impacts on your own P&L?

Yes. Sure.

Yes. Look, I'd start big picture.

We've been navigating regulatory environments in 160 countries around the world, and they're always constantly changing. And certainly, the NLRB recent ruling and whether or not that goes into effect, it will have an impact on us.

But it's nothing that I don't think we can -- we'll have trouble navigating in the long term. Look, I've seen our business grow around the United States.

I've known -- a lot of our franchisees are good friends of mine for decades. I've seen them start as team members and grow to become successful small business people.

And I do think the franchising model is one that's great for our country. It's living the American dream.

It's good for the communities that we serve. And we oppose anything that threatens that model, and I know that there is opposition to that ruling in terms of whether it will actually take effect at the end of the year.

But it's really less of an issue for Yum!, if you think about the landscape that we operate in. Our franchisees tend to be much larger.

We tend to run more of a decentralized model globally and even in the US because our franchisees have a lot more capability. So I have no doubt that whatever the rules are that we have to operate by, we will be able to, as we've proven all around the world over many, many decades.

But this one, obviously, in the short term is something we oppose and we'll have to see how it plays out.

Great. Thank you.

Wondering if you could comment a little bit more on both KFC and Pizza Hut in the US. Solid gains in general over the years from the work the teams have done.

But wondering if you could just frame up how to think about how the brands are positioned in the US right now within their respective categories? And where they can go given some of the opportunities that you've highlighted.

Thank you.

Sure. Yes, obviously, we're really pleased with the progress we're making on both of those businesses.

Pizza Hut US, for example, has been taking share in the category now for, I think, third consecutive clear. And that -- from all the things that we've talked about on these calls and that you're all seeing in the marketplace, the way that they play the aggregators versus their competition, the way they're launching new products and new forms like Melts, which brings in a new consumer.

More recently, you probably saw the announcement about late night and how we're owning that part of the category. So, Aaron Powell and David Graves, their teams are really leaning in and they're on their front foot with Pizza Hut.

It's a tough category, of course, but one we're really pleased with the progress we're making. Similarly, KFC, you've seen us do things like launch nuggets and lean in more on the boneless.

That's a huge opportunity. It's no secret that chicken is a growing category.

We've got the world's greatest chicken brand. We're set up for success there as we evolve our business.

And the team that we've got in place there, also a relatively new team, I think, is doing an amazing job of rolling out those kinds of programs that will lead to incremental sales, incremental category entry points as we talked about earlier on the call. So both businesses, I think, poised for lots of growth.

Operator, we have time for one more question.

Yes. Thank you.

Good morning. I was going to ask about Pizza Hut as well.

And if you could provide any comments on kind of delivery versus carryout performance, also how -- if a third party is still kind of a growing channel for you? And then I know there's disparities by market, which is growing faster.

And what explains some of them do you think that in the US I think it's fair to say that competition is quite significant right now and will be into next year, but do you think that the US can grow on a same-store basis next year?

Yes, obviously, we believe Pizza Hut can and will grow sales. In terms of delivery, one aspect of this maybe is underappreciated is the fact that we now have delivery as a service where we can outsource some of our deliveries through our aggregator partners, that actually was one of the unlocks for us to go after late night when it may have been a little bit harder for us to staff with drivers, being able to hand off those deliveries to our aggregator partners allowed us to extend our hours.

I think it's just another proof point in what a nice job the team is doing in thinking through the strategic benefits we can get from the various relationships we have in the category. But here, in a world where the consumer might be a little bit more pressure, obviously, carry out is playing a bigger role and lower price points will play a bigger role in the pizza category.

That's one of the reasons why Melts, I think, has landed so well and will be a big part of the growth for Pizza Hut going forward. I appreciate everybody's time today.

Obviously, this is a quarter that we're incredibly proud of, much like the last few quarters and never gets old, keep continuing to put up double-digit top line growth and strong bottom line growth. I'll just end with a few comments about what we saw as we went through our internal annual operating plan reviews in the last few weeks.

It's something that you guys don't get a glimpse into. But I can tell you, the spirit in the rooms that -- when we met with the teams, the talent in the room that's displayed, and the way that everybody is sort of on their front foot now, we've got the -- all this work that we've done on technology over the last few years, firmly planted so that we now have something that we can leverage in a much bigger way to grow sales.

I think our franchisee partnerships have never been better. And all of that adds up to what I thought were incredibly inspiring plans going forward to take market share, grow our businesses the right way for the long term and continue to put up results like you saw this quarter.

So we're incredibly excited about the future. We look forward to talking to you on the next call about a little bit more detail about plans for 2024.

Thanks, everybody, for your time today.