LOUISVILLE, Ky. – A paper bucket is “the perfect delivery vehicle” for fried chicken, said Greg Creed, CEO of Yum! Brands Inc., the parent company of KFC. The chicken chain is preparing for a national launch of delivery later this year.

“I always jokingly say that I think the Colonel (Harland Sanders) 60 years ago invented the bucket realizing that one day we’ll be delivering,” Creed said during a May 1 conference call with investment analysts. “It really delivers piping hot, great-tasting food. And I think that’s also a benefit that the KFC customer is currently seeing, which is getting restaurant-quality food delivered to your house.”

Louisville-based Yum! Brands and Grubhub, an online and mobile takeout food-ordering company, announced a partnership in February. Yum! Brands agreed to purchase $200 million of Grubhub common stock, an investment that was expected to help Grubhub expand delivery services in the United States and drive more orders to Yum! Brands’ Taco Bell and KFC restaurants. KFC now offers delivery at 2,000 restaurants in the United States and a click-and-collect option through the Grubhub marketplace at another 3,200 restaurants. Creed said consumers are using delivery primarily during the dinner daypart for larger packs of bone-in chicken.

“And, obviously, it’s incremental,” he said.

In the latest quarter, Grubhub delivery and other operational enhancements at KFC contributed to higher sales, and new value deals drove transactions, Creed said.

Consolidated income for Yum! Brands Inc. in the first quarter ended March 31 was $262 million, equal to $0.85 per share on the common stock, down 39 percent from $433 million, or $1.30 per share, in the prior-year period. Results in the year-ago quarter benefited from a refranchising gain, while the current quarter was unfavorably impacted by the company’s investment in Grubhub. Excluding special items and mark-to-market adjustments, first-quarter earnings per share declined 8 percent to $0.82 from $0.90.

Revenues totaled $1,254 million, down 9 percent from $1,371 million last year. Excluding foreign currency translation, worldwide system sales increased 8 percent, reflecting increases of 9 percent at KFC, 7 percent at Taco Bell and 7 percent at Pizza Hut compared to the year-ago quarter.

Taco Bell same-store sales in the United States grew 5 percent, driven by new $1 and $5 menu items and the relaunch of Nacho Fries.

“Our famous Nacho Fries came back again for a limited time and were so popular that yet again, one in four orders contained fries,” Creed said. “We then finished the quarter off strong by introducing a new limited time offering, Steak Rattlesnake Fries, our signature seasoned fries with marinated steak kicked up with a bit of creamy jalapeño sauce.”

The launch of Taco Bell delivery with Grubhub has been "very encouraging," he added.

“Having launched with marketing support in February, franchisees are all in on this major initiative and are very excited about delivery as an opportunity to drive incremental sales and transactions,” Creed said. “Given it’s early days, we aren’t going to provide specific data, but I will say that both traffic and check saw benefits from the launch. Customers are also loving the new way to get their favorite Taco Bell products. Feedback has been positive, plus the strength of our partnership with Grubhub has allowed for real-time feedback and learnings to continue to elevate the customer experience to even higher levels.

“Delivery is now live in over 4,000 Taco Bell restaurants in the US, and opportunistic market expansion should increase restaurant coverage over time. Additionally, click-and-collect functionality is available on tacobell.com and Taco Bell app while we’re also testing this functionality through Grubhub.”

Yum! Brands may also leverage the Grubhub relationship to expand sales at Pizza Hut, where US same-store sales were flat with the year-ago quarter.

“As we’ve continued to reiterate, for both the US and the international businesses, sustainable improvements in sales growth will remain a slow build as we update and reposition the asset base and make the messaging more distinctive,” Creed said. “We are encouraged by the steps we’ve taken to enhance assets, provide value offerings and improve operations to help our franchisees succeed.

“With that in mind, we are excited about our partnership with Grubhub and the opportunity to leverage the Grubhub marketplace as an additional sales channel for Pizza Hut. We ended the first quarter with over 200 locations on the Grubhub marketplace. While customers are placing the orders on the Grubhub web site, Pizza Hut delivery drivers are completing the orders.”