Yum Brands Took a Deep Dive at The Stock Market

Who is Yum Brands? 

If you didn’t know who or what Yum Brands is that’s okay. We are here to tell you because they are only the single owners of most of your favourite fast food brands. Yes, that’s right. Yum Brands is an American fast food company that owns and operates Taco Bell, KFC, Pizza Hut, and WingStreet worldwide. 

Yum Brands has about 41,000 restaurants around the world in over 125 countries making it the world’s largest fast food company. 

What happened to Yum Brands? 

With our love for fast food, it’s no wonder that last year, Yum Brands revenue generation was around $13 billion. 

But with the Chinese economy not doing so well, where the company gets 54% of its sale, Yum Brands stock crashed nearly 18% on Wednesday. This is after the company reported earnings below expectations and cut its outlook.

What did Yum Brands say?

“While it remains difficult to forecast China sales, we are now estimating full-year same-store sales to be low-single-digit negative,” the fast-food giant said in its third-quarter earnings statement.

“The pace of recovery in our China Division is below our expectations,” Yum Brands said.

CEO Greg Creed said the company faced more challenges than it had expected in the second half of the year in China. Still, same-store sales (sales at restaurants open at least a year) in China increased 2%, and restaurant margins were 20%.

“Clearly, the China Division’s recovery will take longer than we had been anticipating,” Nomura analysts wrote in a note on Wednesday. “But the silver lining to all this bad news is that, it is still recovering. The +2% same-store sales growth for Q3 was the first positive quarter in over a year.”