Industry News | July 19, 2012
Yum! Brands Excels in Q2, Led by Taco Bell
Yum! Brands Asian markets continue to surge, fueled by red-hot growth, said CEO David C. Novak during the company’s second-quarter earnings call on July 19th. Taco Bell, with a 13 percent increase in same-store sales, continues to be the most profitable brand for the company’s U.S. market.
The positive uptick in U.S. sales also spread to KFC, where “business is stabilizing,” Novak said, and Pizza Hut also “delivered another solid quarter of results.” He credited the company’s value propositions, which he said enticed consumers with $10 large pizzas, as well as an assortment of bundled, complete meals in $10 and $20 boxes. He also touted Pizza Hut’s entry into the U.S. sandwich market, with the P’Zolo, a sandwich wrap.
Novak shared his excitement with investors about the July launch of Cantina Bell, a new line of ethnic Mexican dishes from celebrity chef Lorena Garcia. Novak said the new product line will “broaden the appeal of Taco Bell, offering fast-casual products at two-thirds the price” when compared to competitors’ offerings. The quick serve continues to progress toward the goal of rolling out a breakfast menu at Taco Bell stores across the U.S. by 2014, Novak said.
With 696 Pizza Hut restaurants now operating in China, Novak said the company’s strategy is to build leading brands in the country in every significant category.
Comparing the ratio of four restaurants per each one million Chinese consumers to the U.S., with its 60 restaurants per million, Novak said the Yum! Brands International new unit growth potential in emerging markets “is arguably the best in retail,” providing the company “a long runway” for future growth.
Patrick Grismer, CFO of Yum! Brands, said it was “comforting to know that a large portion of our earnings per share is in the ground before we even start each year. With record new unit development expected this year, we’ve never felt better about our future growth.”
By Jan Fletcher
Food & Beverage
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