Yum Brands Sales Witnessing Sharp Decline in its Chinese Operation

Published By : 06 Oct 2015 | Published By : QYRESEARCH

The Chinese operations of the American fast-food giant, Yum Brands Inc. is showing sharp decline in sales. The sales for the FY 2015-16 have fallen by over 10.0% so far compared to the previous financial year.

The firms report for the 3rd quarter, however, shows dramatic improvement. Rebounding of sales sharply from a food safety scandal till a new problem arises, has become a pattern for this fast-food chain in recent years. The upcoming reports are also expected to show impacts of the slowing Chinese economy and the deflation of Yuan in August on the firm.

Yum Brands Inc. is likely to earn US$1.06 per share, which is a little less than 90 cents from 2014 and shows its inclination towards its promised FY 2015-16 EPS growth of not less than 10%. A unit, which has received less investment, will be helping Yum in meeting its goal.

For this quarter, the firm is expected to earn a revenue of US$3.67 bn, whereas, during the same period in 2014, it had reported a revenue of US$3.35 bn.

On the other hand, the same-store sales of Taco Bell have increased by 6% in both, Q1 and Q2 of FY 2015-16 on account of introduction of new food items as well as breakfast. Additionally, it has its operations in domestic locations only, which makes its unruffled even when the dollar gets stronger.

Yum Brand Inc. traded at a premium of 25% on its multiple of forward earnings before its recent most decline in China. However, the stock of Yum could manage only 7% till now

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