Taco Bell is working to regain its momentum after the Cyclospora food-safety issue disrupted sales during the summer, sending U.S. same-store sales down 4 percent in Q3.
The setback interrupted a period of growth for Yum! Brands’ largest domestic business, but the company says Taco Bell is recovering faster than expected. Same-store sales improved each week following a low point in July, and the chain has outperformed the QSR industry in same-store sales growth since late September.
The recovery is particularly important for Yum!, which completed its divestiture of Pizza Hut in early September. Taco Bell now accounts for 38 percent of Yum!’s divisional operating profit, excluding Pizza Hut, making its domestic performance a critical component of the company’s financial outlook.
During Yum!’s third-quarter earnings call, CEO Chris Turner expressed confidence in the brand’s ability to regain customers and sustain its recent progress.
“I’m incredibly proud of how the Taco Bell team and our franchise partners have come together with urgency and focus to drive a rapid recovery,” Turner said.
The company attributed Taco Bell’s third-quarter decline to the food-safety issue, which affected the U.S. business particularly hard. International same-store sales increased 5 percent.
Despite the sales disruption, Taco Bell continued investing in menu innovation, promotional activity, loyalty, and digital technology. Yum! believes those investments have helped customers return and will support the brand’s performance through the final months of 2026.
One of the clearest signs of recovery came from Taco Bell’s loyalty program.
Following the initial sales decline, loyalty members returned to restaurants twice as quickly as customers who were not enrolled. The U.S. program also continued attracting new members during the quarter, contributing to 25 percent year-over-year growth in total membership.
The brand’s digital offerings include the Build Your Own Luxe Box, which Yum! identified as Taco Bell’s most-ordered digital item.
Value is another major component of Taco Bell’s recovery strategy, particularly as higher gasoline prices put additional pressure on household budgets. The chain continues promoting its Luxe Cravings Boxes alongside the Luxe Value Menu, which includes 10 items priced at $3 or less. The value menu has been particularly appealing to lower-income customers, according to Yum!
The company has secured widespread participation from franchisees. More than 90 percent of Taco Bell’s U.S. restaurants offer all 10 Luxe Value Menu items at the advertised price points.
Taco Bell is complementing those offerings with limited-time promotions and collaborations intended to generate customer interest without relying exclusively on discounts.
During the third quarter, the chain revived its Decades Menu, bringing back popular products from earlier periods of its history. The brand also collaborated with Mexican music artist Peso Pluma and Tajín, the chili-lime seasoning company, to connect its menu with popular culture.
Additional promotional activity is planned for Q4. Taco Bell announced a collaboration with singer Olivia Rodrigo involving a pink variation of Mountain Dew Baja Blast, one of the chain’s signature beverages.
Additionally, The company hosted its inaugural Liv Mas Open, a nine-hole golf event featuring comedian and actor Kevin Hart, with plans to stream the competition to fans later in November.
The brand’s beverage business is becoming another area of investment.
Yum! pointed to encouraging early results from Taco Bell’s Live Más Café concept, which is testing an expanded beverage experience. The company is examining how to deliver the concept efficiently, including construction expenses, staffing requirements, and restaurant operations.
A new flagship location is scheduled to open in Las Vegas in November.
Technology is playing a larger role in restaurant operations as well.
Yum! has expanded its use of voice AI at Taco Bell drive-thrus, with the technology operating in more than 900 restaurants during the third quarter. The company is targeting more than 1,500 deployments by the end of 2026.
The system is intended to handle customer orders and allow restaurant employees to devote more attention to preparing food and serving guests. Yum! is exploring additional capabilities too, including loyalty integration, multilingual ordering, support for multiple drive-thru lanes, and dashboards that give restaurant operators more visibility into performance.
Turner described the technology as an evolving product, with opportunities to improve its usefulness after installation.
“These are products which, alongside deployment growth, they have the potential for constant new feature development,” he said.
The company sees potential for its digital investments to improve restaurant economics, an important consideration as Taco Bell works toward its longer-term goal of reaching $3 million in average unit volumes.
Taco Bell’s international business offers another growth opportunity. The chain has tripled its international system sales since 2018, according to Yum!, and is introducing signature products in additional markets.
In the U.K., Taco Bell introduced Baja Blast in late June, making the country the first market outside North America to offer the beverage. Yum! reported sustained double-digit sales performance for the product following its introduction.
