KFC, Pizza Hut, and Taco Bell are some of the restaurants you may have encountered or been a consumer of. Investors can be shareholders in these companies by investing in Yum! Brands, their holding company.
The company owns and franchises quick-service restaurants worldwide: it develops, operates, franchises, and licenses a worldwide system of restaurants that prepare, package, and sell a menu of food items. Yum! has over 55,000 restaurants in over 150 countries and territories.
Here's a breakdown of their company brands:
Disclaimer: The brands may not be limited to the logos on the image and may change. The use of logos is for educational purposes only.
Financials, dividend, and buyback
Despite the inflationary pressure and the Russian impact, Yum! Brands achieved an 8% system sales growth. Its net income for the 2022 year was $1.3 billion vs $1.5 billion in 2021; its earnings per share was $4.63. Taco Bell division sales remained high; the operating margin was 34.9%. KFC 42% and Pizza Hut 38.5%. By the end of the year, it had a balance of $647 million. View the 2022 performance Infographic here.
By 12 September 2022, $236 million was left from the previous buyback program authorized in May 2021; Yum! Brands approved a buyback program ($2 billion) at that time. It repurchased 1.4 million ($486 million) shares during the fourth quarter that ended in December 2022.
The board further declared an increased quarterly dividend of $0.60 (the highest since 2004), and it has a history of paying dividends up to four times a year. The total payout during the 2021 Calendar Year (CY) was $2.28 per share or $0.57 per quarter.
Are they still expanding?
KFC and Taco Bell divisions opened over 200 new restaurants during the fourth quarter, and Pizza Hut had around 500 new restaurants. This is while the company continues to close its Russian units due to the sanctions on the country. A total of 4,560 were opened and developed during the year 2022.
The company has also been expanding its technology portfolio, where it completed three acquisitions in 2021 to advance its AI offering. Dragontail Systems Ltd is one of the acquisitions which, according to the CFO of Yum! Brands, Chris Turner: "Dragontail's cutting-edge restaurant technology allows us to tap into the power of AI to optimize the end-to-end food preparation process and accelerate and further enhance our delivery technology capabilities".
Yum! Brands CEO, David Gibbs also said: "A key growth driver for our business and our teams is the continued acceleration of our digital and technology strategy". Other acquisitions during the year include Tictuk Technologies and Kvantum Inc.
In 2022, at the 13th Annual U.S. All Stars Conference in London, the CFO added that it's are actively "scanning categories" in the merger & acquisition (M&A) market.
Earnings
Yum! Brands released its earnings in May 2023.