Taco Bell cyclospora outbreak hangs over Yum Brands earnings
Yum reports Thursday as a lettuce-linked Taco Bell outbreak pressures traffic, shares and Wall Street forecasts for the rest of 2026.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Yum Brands heads into its second-quarter report with the Taco Bell cyclospora outbreak drawing attention away from the numbers investors expected to see. The issue matters because Taco Bell is one of Yum’s most important growth drivers, and traffic data already points to a sharp hit.
Yum is expected to release earnings before the market opens Thursday. Analysts surveyed by LSEG expect the company to post earnings of $1.58 a share on revenue of $2.2 billion, while Taco Bell is projected to show 7% same-store sales growth for the quarter, CNBC reported.
That quarter ended more than a month before the Food and Drug Administration linked the illness outbreak to lettuce served at some Taco Bell restaurants. Since that FDA link, visits to Taco Bell locations have fallen by double digits on a daily basis, according to Placer.ai data cited by CNBC.
Yum shares have dropped 5% over the same period, leaving the company with a market value of about $42 billion, according to CNBC. FactSet data cited by CNBC showed that seven industry analysts cut their full-year earnings-per-share estimates for Yum between June 30 and Tuesday.
What is the Taco Bell cyclospora outbreak?
The Centers for Disease Control and Prevention said the cyclosporiasis outbreak had sickened at least 1,947 people as of Friday, with 98 hospitalizations and no deaths reported. Federal health agencies have identified iceberg lettuce from Taylor Farms as the likely source, CNBC reported.
Cyclosporiasis is a gastrointestinal illness caused by a parasite. The FDA first tied the outbreak to lettuce served by Taco Bell, and the company removed affected iceberg lettuce from restaurants by July 17, according to CNBC.
Health and Human Services Secretary Robert F. Kennedy Jr. told reporters the outbreak was “under control,” CNBC reported. The CDC, however, had not declared the outbreak over, and daily case counts in Michigan, described by CNBC as the apparent center of the initial outbreak, were still rising.
Why Taco Bell matters to Yum Brands
Yum owns Taco Bell, KFC and Habit Burger & Grill, and recently divested Pizza Hut. CNBC reported that Yum treats Taco Bell, along with KFC’s international business, as one of its “twin growth engines.”
Taco Bell has been a standout in Yum’s portfolio, with a loyal customer base and steady same-store sales gains even as diners have become more price-sensitive, CNBC reported. KFC’s international business has been growing, while its U.S. results have weakened enough that Yum no longer breaks out domestic KFC sales, according to CNBC.
Habit Burger & Grill has fewer than 400 locations and is much smaller than Yum’s core chains, CNBC reported. With Pizza Hut no longer in the portfolio, Taco Bell’s role in Yum’s earnings story has become even more prominent.
How analysts are framing the risk
RBC Capital Markets analyst Logan Reich wrote in a July 21 note that the outbreak likely had little effect on Taco Bell’s second-quarter results, CNBC reported. Reich said the main investor debate is the impact on the third quarter and beyond, and RBC lowered its third- and fourth-quarter Taco Bell estimates.
Taco Bell has started efforts to reassure customers. CEO Sean Tresvant wrote in an open letter on LinkedIn that the chain must earn diners’ loyalty “one meal at a time” and pledged to put safety first and communicate transparently.
The chain has also used low-price promotions, including $1 Enchiritos, nacho fries and Mexican Pizza offers, according to CNBC. Some social media reaction to Taco Bell’s Instagram statement was supportive, including a comment from former reality TV personality Lo Bosworth saying, “I still luv u Taco Bell.”
CNBC reported that analysts generally see McDonald’s 2024 E. coli outbreak as a more likely comparison than Chipotle’s years-long food-safety crisis, provided Taco Bell does not face another near-term incident. McDonald’s U.S. sales recovered by the second quarter of 2025 after the CDC declared that outbreak over, according to an M Science research note cited by CNBC.
This story draws on original reporting from CNBC.