Yum Brands Inc. expects damage from a dropped lawsuit over the quality of Taco Bell’s ground beef to linger in the third quarter, but to ease during the remainder of the year, and laid out plans to turn the business around.
Taco Bell is Yum’s most profitable U.S. brand. A sharp decline in closely watched same-restaurant sales, along with higher-than-normal commodity inflation, resulted in a 28 percent decline in U.S. operating profit for the second quarter.
A California woman in January sued Taco Bell over the contents of its seasoned beef. Taco Bell responded by saying it planned to take legal action against the “false statements” being made about its food. In April, the woman voluntarily dismissed her lawsuit.