Chinese Growth Offset Weaker U.S. Sales

Article Excerpt

YUM! BRANDS INC. $53 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Average) is enjoying strong growth at its operations in China, now that fears of avian flu and SARS have faded. China accounts for 15% of Yum’s sales and profit, and the company estimates that same-store sales in the third quarter of 2006 at the China division will grow 25% (28% in U.S. dollars) over the year-earlier quarter. At its other international operations, Yum forecasts same-store sales growth of 9% (11% in U.S. dollars). This will help offset slowing growth at Yum’s U.S. operations, where third quarter same-store sales will likely fall 2%. But new menu items should help improve sales at Yum’s U.S. KFC and Taco Bell outlets in the fourth quarter. Yum Brands is a buy. buy…

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