Yum says Taco Bell sales recovering after temporary hit from cyclospora outbreak

For the second quarter ended June 30, Taco Bell same-store sales rose 7%, compared with 4% a year earlier.

Yum reported a 3% rise in comparable sales, in line with analysts' expectations and up from 2% growth a year earlier.

The company, which is set to sell its Pizza Hut chain in a $2.7 billion deal, also posted 2% same-store sales growth at KFC.

Yum's quarterly adjusted earnings per share of $1.62 beat estimates of $1.58, according to data compiled by LSEG.

July 30 (Reuters) - Taco Bell's sales hit from the Cyclospora outbreak is beginning to ease, Yum Brands executives said on Thursday, reassuring investors that the fallout would be temporary and lifting the stock about 4% in early trading.

U.S. same-store sales at Taco Bell outlets, which were first linked to the outbreak earlier this month, are down 2% so far this quarter, with a peak drop seen in mid-July, Yum executives said on a post-earnings call.

"Elevated uncertainty initially weighed on consumer demand, and since then, consumers have become increasingly aware that this is an industry-wide issue, not an issue specific to Taco Bell," CEO Chris Turner said.

The peak impact on domestic comparable sales at the chain was on July 18, Yum CFO Ranjith Roy said, with "relatively steady recovery" observed since.

Foot traffic at the chain has declined every day since July 13. Visits were down 20.8% on July 23 compared with the average for Thursdays between January 1 and July 6, according to Placer.ai data.

Taco Bell has been Yum's primary growth engine, drawing customers with its value-focused Tex-Mex offerings at a time when budget-conscious consumers have been cutting back on discretionary spending, making the traffic slowdown particularly important for investors.