Jul. 16, 2014, 5:30 PM
- YUM's worldwide system sales rose 6% Y/Y in Q2, better than Q1's 4% growth. Restaurant margin rose 300 bps to 15.5%.
- China division sales (clobbered last year by avian flu issues) +21% vs. +15% in Q1. Same-store sales +15%, unit growth +7%.
- KFC division sales +5%, same-store +2%. Pizza Hut division -1%, same-store -3%. Taco Bell division +3%, same-store +2%. India division +18%, with 25% unit growth more than offsetting a 2% same-store drop.
- Yum still plans to open at least 700 new restaurants in China, and 1,250 in other foreign markets. The company is "taking significant actions" to improve the performance of its U.S. Pizza Hut ops (previous).
- China division restaurant margin jumped 620 bps to 16.8%, while the Pizza Hut division's restaurant margin fell 640 bps to 7.2%. Taco Bell's restaurant margin fell 270 bps to 17.7%, and KFC's rose 30 bps to 12.9%.
- $346M has been spent on buybacks YTD, up from $170M at the time of the Q1 report.
- YUM -2.5% AH. Q2 results, PR.
Jul. 16, 2014, 4:11 PM
Jul. 15, 2014, 5:35 PM
Jul. 14, 2014, 11:14 AM
- Pizza Hut (NYSE:YUM) plans to offer more Hershey-branded dessert products on its menu as it plays catch-up with peers that saw cookie sales boost margins.
- The Pizza Hut brand has struggled to keep up in the U.S. this year with its same-store sales decline of 5% in Q1 looking anemic compared to the 9.6% comp Papa John's churned up over the same period.
Jul. 11, 2014, 11:35 AM
- Taco Bell (YUM) plans to update its Cantina Bell menu next week with more meat-heavy options and new protein items such as Greek yogurt.
- Incoming CEO Brian Niccol says the changes are being made in part to appeal to Millennials.
- The Cantina Bell menu hasn't dented the momentum at Chipotle (CMG -0.3%) as some CMG skeptics forecast it would.
Jul. 2, 2014, 9:05 AM
- Fast-food consumers value quality to a larger degree than price, according to a new survey from Consumer Reports.
- The publication calls the results a "wake-up call" for the industry.
- In-N-Out Burger, The Habit Burger Grill, and Culver's ranked at the top of a list based on food quality, value, and customer service.
- McDonald's (MCD) didn't crack the top 20 for hamburger chains - while Taco Bell (YUM) only managed a #8 ranking in the Mexican fast-food category.
- Papa Murphy's (FRSH) took down the top spot for pizza chains.
Jul. 1, 2014, 12:06 PM
- Restaurant operators in California are expected to increase prices to counterbalance an increase in the minimum wage in the state which takes effect today,
- The minimum hourly wage goes to $9 from $8 as an incremental step in a plan to take it to $10 per hour by 2016.
- Fast-food stocks: MCD, BKW, WEN, JACK, YUM, SONC, PLKI
Jun. 17, 2014, 7:52 AM
- Count IMF Managing Director Christine Lagarde as another proponent of raising the federal minimum wage in the U.S.
- Lagarde points to the 50M working Americans living below the poverty level in making her claim that "we" have to do something about it.
- Legislation on a minimum wage increase has been stalled in Congress, but is likely to be teed up as mid-term election issue.
- Related stocks: MCD, BKW, SONC, DENN, WMT, JACK, GTIM, WEN, TAST, PLKI, PZZA, YUM, NATH, CKEC, AMC, RGC.
- Bloomberg Lagarde interview
Jun. 9, 2014, 1:46 PM
- Data from NPD Group indicates the average American spends 12 minutes a day on breakfast.
- The highly-contested daypart pits major cereal sellers such as Kellogg (K), Post Holding (POST), and General Mills (GIS) against fast-food chains like McDonald's (MCD), Starbucks (SBUX), Taco Bell (YUM), and Dunkin' Brands (DNKN).
- Convenience-store chains are also a major factor as C-stores such as Circle K (ANCUF), 7-11, Pantry (PTRY), BP Connect (BP), On the Run (XOM), Speedway America (MPC), Kwik Shop (KR), and Qwiktrip continue to innovate and show some positive growth trends.
- What to watch: Analysis from Edward D. Jones suggests consumers tend to stay with their routines. The read is that companies in the breakfast business need to compete for market share within their segment - instead of trying to change consumer behavior. Taco Bell is utilizing that strategy with its marketing message which paints McDonald's as old-fashioned.
Jun. 9, 2014, 8:22 AM
- Some restaurant sector analysts think Taco Bell's (YUM) aggressive breakfast push has cut into McDonald's (MCD) breakfast market share to slow overall growth trends for the company in the U.S.
- Though execs with McDonald's cited "ongoing broad-based challenges" as a drag on U.S. sales, the relentless marketing push by Taco Bell to younger consumers could be aging the brand.
- MCD -0.2% premarket
Jun. 3, 2014, 8:58 AM
- The city council in Seattle approves an increase in the minimum wage to $15 per hour.
- Mayor Ed Murray is expected to sign the measure into law today.
- The pay floor will be implemented over several years with the specific time-frame depending upon the size of a business.
- Fast-food restaurant chains (MCD, BKW, WEN, JACK, YUM, SONC, PLKI) are expected to feel the biggest pinch from higher minimum wage levels.
May 29, 2014, 10:21 AM
- Shares of Popeyes Louisiana Kitchen (PLKI +10.7%) shoot higher after the company beats estimates with its FQ1 report.
- The company showed stronger sales trends than rivals with a 4.5% rise in global comparable-store sales. By comparison, the KFC division of Yum Brands (YUM +0.1%) showed a 4% drop in comp sales in the U.S. during its last quarter.
- Popeye's improved its market share of the domestic chicken-QSR segment by 210 bps to 22.3% over the last year.
May 20, 2014, 5:51 PM
- Brian Niccol, currently the head of Taco Bell U.S., has been tapped by YUM to be the Mexican fast-food chain's new CEO in January. He'll replace Greg Creed, who's set to take over as Yum's CEO at that time.
- Taco Bell has been a laggard for Yum amid tough competition from more upscale chains such as Chipotle. System sales were flat Y/Y in the March quarter, and same-store sales down 1%.
May 13, 2014, 10:20 AM
- NPC International thinks Pizza Hut (YUM) has fallen behind its rivals in digital platforms.
- The large franchisee cited the digital shortfall by the chain as it reported its own earnings earlier this week.
- Restaurants analysts have noted in the past that Domino's has picked up pizza market share as a result of its robust mobile app.
May 2, 2014, 10:37 AM
- Taco Bell (YUM) has launched a third round of TV advertisements to promote the chain's new breakfast menu.
- The recent media blitz has been the largest in Taco Bell's history and comes amid recent promotions from Starbucks and McDonald's aimed at diverting consumer attention.
- The new round of ads are clearly aimed at younger audience (watch on YouTube) as the waffle taco breakfast is linked to raves and twerking.
- What to watch: Some restaurant sector analysts note the aggressive spend by Taco Bell could be felt in Q2 results for Yum Brands.
May 2, 2014, 9:28 AM
- A report from Technomic indicates the fast-casual segment of the restaurant industry increased sales by 11% and unit count by 8% last year to easily outdistance the average growth in the sector.
- Panera (PNRA), Chipotle (CMG), and Panda Express (private) all generated double-digit sales growth during the period.
- The trend hasn't gone unnoticed by fast-food operators. Taco Bell (YUM) plans to launch two new concepts - U.S. Taco and Urban Taproom - in California, while KFC (YUM) is experimenting with KFC Eleven. Red Lobster (DRI) is also active in testing the segment with its Seaside Express concept.
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