Is Yum! Brands a Buy After Recent Earnings?
T = Trends for a Stock’s Movement
Yum Brands is a quick-service restaurant company based on a number of system units, with approximately 37,000 units in more than 120 countries and territories. The company — through its three main restaurant chains KFC, Pizza Hut, and Taco Bell — develops, operates, franchises, and licenses a worldwide system of restaurants. These popular food chains prepare, package, and sell a menu of low-priced food items. Convenient and tasty foods continue to rise in popularity worldwide, which allows Yum Brands to provide food items demanded by consumers worldwide.
Yum Brands shares fell during premarket trading after the owner of fast food joints including KFC and Pizza Hut posted earnings Tuesday that revealed the company is still struggling in China due to an avian flu scare and the slumping Chinese economy. Analysts had expected declines in Yum’s China business, but the company still missed estimates. Yum posted earnings per share of 85 cents, falling below analyst expectations of 93 cents. Same-store sales in China fell 11 percent. “Even with our recent challenges, KFC is unquestionably the category leader in China and we remain confident sales will fully recover from the adverse publicity surrounding the December poultry supply incident,” Yum CEO David Novak said in the company’s earnings report.