Financial Analysis Report Yum! Brands
Financial Analysis Report (FAR)
YUM! Brands, Inc.
The fast food and quick service restaurant industry consisted of about 945,000 restaurants representing approximately $552 billion in annual sales. The industry is highly fragmented, with the top 50 companies holding about 25% of industry sales and is intensely competitive with respect to food quality, price, service, convenience, location and concept (Hoovers 2009). The major companies of the industry include McDonald’s, Burger King, Subway, Domino’s Pizza, Dairy Queen and the Yum Brands restaurant companies. Quick service restaurants are often affected by changes in consumer tastes; national, regional or local economic conditions; currency fluctuations; demographic trends; traffic patterns; the type, number and location of competing food retailers and products (Yum! Brands website, 2009). The profitability of individual companies within the industry depends on efficient operations, effective marketing and ingenious business strategy (Hoovers 2009). Knowing the way the industry fluctuates, in January 1997 PepsiCo announced its decision to spin-off its restaurant businesses to shareholders as an independent public company. Effective October 6, 1997, PepsiCo disposed of its restaurant businesses by distributing all of the outstanding shares of Common Stock of TRICON Global restaurants to its shareholders. Then on May 16, 2002, the Company changed its name from TRICON Global Restaurants, Inc. to YUM! Brands, Inc (Yum! Brands website, 2009) Yum! Brands, Inc., based in Louisville, Ky., is the world's largest restaurant company in terms of system restaurants with more than 36,000 restaurants in over 110 countries and territories. In terms of overall industry performance, Yum! Brands, Inc. is second only to McDonald’s restaurant. The Company’s Common Stock trades under the symbol YUM and is listed on the New York Stock Exchange (“NYSE”). They were ranked #239 on the Fortune 500 List, with
YUM! Brands, Inc.
The fast food and quick service restaurant industry consisted of about 945,000 restaurants representing approximately $552 billion in annual sales. The industry is highly fragmented, with the top 50 companies holding about 25% of industry sales and is intensely competitive with respect to food quality, price, service, convenience, location and concept (Hoovers 2009). The major companies of the industry include McDonald’s, Burger King, Subway, Domino’s Pizza, Dairy Queen and the Yum Brands restaurant companies. Quick service restaurants are often affected by changes in consumer tastes; national, regional or local economic conditions; currency fluctuations; demographic trends; traffic patterns; the type, number and location of competing food retailers and products (Yum! Brands website, 2009). The profitability of individual companies within the industry depends on efficient operations, effective marketing and ingenious business strategy (Hoovers 2009). Knowing the way the industry fluctuates, in January 1997 PepsiCo announced its decision to spin-off its restaurant businesses to shareholders as an independent public company. Effective October 6, 1997, PepsiCo disposed of its restaurant businesses by distributing all of the outstanding shares of Common Stock of TRICON Global restaurants to its shareholders. Then on May 16, 2002, the Company changed its name from TRICON Global Restaurants, Inc. to YUM! Brands, Inc (Yum! Brands website, 2009) Yum! Brands, Inc., based in Louisville, Ky., is the world's largest restaurant company in terms of system restaurants with more than 36,000 restaurants in over 110 countries and territories. In terms of overall industry performance, Yum! Brands, Inc. is second only to McDonald’s restaurant. The Company’s Common Stock trades under the symbol YUM and is listed on the New York Stock Exchange (“NYSE”). They were ranked #239 on the Fortune 500 List, with