A Snapshot of Yum Brands’ Business

February 23rd, 2018 by Trefis Team
YUM: Yum! Brands logo
YUM
Yum! Brands

Yum Brands (NYSE:YUM) generates its revenues primarily from three restaurant chains – KFC, Pizza Hut, and Taco Bell. We have created an interactive dashboard highlighting some of the key items from Yum Brands’ income statement. You can adjust revenues, margins and earnings multiple for 2018 to see how it impacts the company’s earnings, and arrive at your own stock price estimate for Yum Brands. Below are some of the charts and data from the interactive dashboard.

Yum Brands’ Revenue Breakup

  • KFC accounts for over 50% of the company’s revenues
  • Taco Bell accounts for 15% of the total revenues
  • Pizza Hut accounts for around 30% of overall revenues

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KFC Revenues

  • KFC has been facing a decline in company sales, while its franchise & licensing fees are seeing slight growth.This can be attributed to refranchising of company-owned stores.
  • We expect the trend to continue and expect the company sales to decline in 2018 .

Pizza Hut Revenues

  • Pizza Hut revenues have also been on a decline over the past few quarters, primarily due to refranchising of its stores.
  • In 2017, there were 389 company-owned Pizza Hut restaurants refranchised. Note that the company plans to have 98% franchise restaurant ownership by the end of 2018.
  • As such, we expect the trend to continue in 2018 as well, and estimate a decline in overall Pizza Hut revenues.

Taco Bell Revenues

  • Taco Bell revenues declined 7% in 2017 led by refranchising of the company owned stores.
  • We expect the trend to continue in 2018, and estimate the revenues to decline.

Yum Brands’ Operating Profit

  • Note that 2017 operating profit margin was higher due to Special Items
  • We expect the margin to normalize in 2018 at around 33%.

Net Income & EPS

  • Based on above estimates, we expect the company’s EPS to be around $3.40 in 2018

 

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Like our charts? Explore example interactive dashboards and create your own