Yum! Brands, Inc. (YUM, Financial)
Yum! Brands has taken a hit on tough competition for Pizza Hut. They have struggled to keep up with Dominoes’ prices and delivery speed and have been slow to adapt to new fast-casual pizza chains such as Blaze, Mod and Pieology. Their $200 million investment in Grubhub has fared poorly. However, KFC and Taco Bell both had same-store sales growth of over 3% as well as operating margin expansion. Yum! Brands’ diversity in fast food affords them a greater stability should one of their three brands falter. They had over $700 million in free cash flow in the quarter and are projecting greater than 100% free cash flow conversion in 2020.
From Jeff Auxier (Trades, Portfolio)'s Auxier Asset Management fourth-quarter commentary.
