Financial Analysis of Yum! Brands

Financial Analysis of Yum! Brands

Table of Contents:

1. Company Background…………………………………………………… 3

1.1 Company Summary……………………………………… 3

1.2 Company History………………………………………… 5

1.3 Industry……………………………………………………. 7

1.4 Competitors………………………………………………. 7

2. Stock Price Analysis…………………………………………………….. 8

3. Risk and Return Analysis……………………………………………… 10

4. References……………………………………………………………… 12

Company Background

Company Summary:

Yum! Brands, Inc., is a quick service restaurant (QPR) company based in Louisville, KY. They are the world’s largest restaurant company in terms of system units with nearly 38,000 restaurants worldwide and over 1 million associates. Yum! Brands, Inc. is currently ranked #214 on the Fortune 500 list and generated more than $12 billion in revenue in 2011. The company consists on a group of restaurant brands, the most famous being KFC (more than 17,400 units), Pizza Hut (more than 13,700 units) and Taco Bell (more than 5,900) and they are the global leaders of the chicken, pizza and Mexican food categories respectively. Franchisees, affiliates and licensed operators are responsible of running over 75% of the company’s restaurants. In every day of the year 2011 four new Yum! restaurants opened outside of the United States making Yum! Brands Inc. a leader in international retail development.

The Company operates in five segments:

YUM Restaurants China: is based in Shanghai, China and it includes only Mainland China. It consists of around 4,500 restaurants; most of them are KFC’s and Pizza Hut’s. The company works with more than 500 independent suppliers and owns the distribution system.

YUM Restaurants International (YRI): is based in Dallas, Texas. It consists of approximately of 14,500 restaurants; most of them are KFC’s and Pizza Hut’s operating in over 120 countries outside the United States and with over 1,500 independent suppliers.

Pizza Hut: in 2011, Pizza Hut operated in 97 countries throughout the world. They had 764 units in...