Yum! Brands Places Long John Silver’s and A&W All-American Restaurants for Sale
by Business Wire
Yum! Brands, Inc. (NYSE:YUM) today announced its plans to place its Long John Silver’s and A&W All-American Food Restaurants for sale, and has begun a process to identify a buyer. The Company is sharpening its long-term growth focus on building leading brands in every significant category in China, driving aggressive international expansion, and improving its U.S. brand positions by building new dayparts and sales layers at Taco Bell, Pizza Hut and KFC.
“Over the past decade, Yum! has delivered annual EPS growth of 13 percent, exceeding our 10 percent annual growth target. This has been driven by aggressively building restaurants in China and Yum! Restaurants International at a pace of nearly four new restaurants every day of the year. We do not believe Long John Silver’s and A&W-All American Food restaurants fit into our long-term growth strategy,” said David C. Novak, Yum! Brands, Inc. Chairman and Chief Executive Officer. “Accordingly, we have decided to put these two great brands up for sale and we will complete the sale only once the right buyer or buyers have been identified and we can ensure a seamless transition.” The Company does not expect the eventual sale to have a material impact to its ongoing earnings or cash flow.
In 1998, when Yum! Brands was spun-off from PepsiCo, 22 percent of its profits were sourced internationally. Today, about 65 percent of the Company’s profits are from the China and Yum! Restaurants International divisions, and the Company expects that percentage to grow to 75 percent by 2015. In the U.S., Taco Bell accounts for approximately 60 percent of the Company’s profits, followed by Pizza Hut and KFC. The Long John Silver’s and A&W All-American Foods Brands account for a total of 1,630 restaurants, all of which are owned and operated by franchisees.
Yum! Brands, Inc., based in Louisville, Ky., is the world’s largest restaurant company in terms of system restaurants with more than 37,000 restaurants in more than 110 countries and territories. The company is ranked #216 on the Fortune 500 List, with revenues of nearly $11 billion in 2009. Four of the company’s restaurant brands – KFC, Pizza Hut, Taco Bell and Long John Silver’s – are the global leaders of the chicken, pizza, Mexican–style food categories and quick–service seafood categories. A&W Restaurants is the longest running quick–service franchise chain in America. Outside the United States, the Yum! Brands system opened more than four new restaurants each day of the year, making it a leader in international retail development. The Company has consistently been recognized for its reward and recognition culture, diversity leadership, community giving, and consistent shareholder returns. In 2007, the Company launched World Hunger Relief, the world’s largest private sector hunger relief effort to raise awareness, volunteerism and funds to benefit the United Nations World Food Programme (WFP) and other hunger relief agencies. To date, this effort has raised nearly $85 million for WFP and other hunger relief agencies and is helping to provide approximately 350 million meals, saving the lives of millions of people in remote corners of the world where hunger is most prevalent.