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YUM! Brands' Taco Bell Unveils Expansion Plans for Spain
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Shares of Yum! Brands, Inc. (YUM - Free Report) had been outperforming the Zacks categorized Retail–Food & Restaurants industry by recording a growth of 18.1% since the beginning of year to Oct 31, while the industry declined nearly 4%.
The spin-off of the company’s China division into an independent, publicly-traded company on Oct 31, 2016, however, impeded the tale temporarily. Post separation, shares of the company underperformed the broader industry by recording a decline of 25% till today, as against the industry’s growth of 6.7%.
We say ‘temporarily’ because we are positive on the company’s efforts to subsidize the effects of the spin-off. One such attempt in this direction is the international expansion of its Taco Bell brand, the world’s largest Mexican-inspired restaurant chain.
Recently, the company announced that it has inked a definitive agreement with Casual Brands Group of Madrid, a franchising partner of Taco Bell since 2008, to add 45 restaurants across Spain and more than 900 jobs to the local economy. The vision is to open over 70 Taco Bell outlets in Spain by 2020, establishing it as the largest market in Europe.
Spain has been a lucrative market for Taco Bell over the last eight years and the company sees immense potential here on the back of persistent customer loyalty. It was also the first Taco Bell market in the world to serve beer and has now pioneered other promotional offerings, which is indicative of the brand’s ability to create exclusive area-specific specials leveraging on local insights.
Last month, Taco Bell revealed extensive brand evolution plans incorporating its first logo refresh in over 25 years, which followed the recently unveiled new restaurant design concepts. These initiatives are part of the company’s growth plan to establish 2,000 new restaurants globally, create 100,000 jobs in the U.S and become a $15 billion brand by 2022.
Though the company’s efforts to revive business along with various sales and digital initiatives bode well, the China business accounted for more than half of the company’s total revenue and has played a pivotal role in its solid performance over the last few years. Thus, it remains to be seen how profitable the endeavors turn out to be and whether they can uplift the currently Zacks Rank #5 (Strong Sell) rated company.
Stocks to Consider
Here are some well-performing restaurant stocks you can consider at the moment:
Dave & Buster’s Entertainment, Inc. (PLAY - Free Report) – a Zacks Rank #1 company – has a positive record of earnings surprises in each of the reported quarters since its IPO in Oct 2014.
Domino's Pizza, Inc. (DPZ - Free Report) carries a Zacks Rank #2 (Buy) and is expected to witness a 23.1% increase in full-year 2016 earnings, while the industry is expected to grow 6.2%.
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YUM! Brands' Taco Bell Unveils Expansion Plans for Spain
Shares of Yum! Brands, Inc. (YUM - Free Report) had been outperforming the Zacks categorized Retail–Food & Restaurants industry by recording a growth of 18.1% since the beginning of year to Oct 31, while the industry declined nearly 4%.
The spin-off of the company’s China division into an independent, publicly-traded company on Oct 31, 2016, however, impeded the tale temporarily. Post separation, shares of the company underperformed the broader industry by recording a decline of 25% till today, as against the industry’s growth of 6.7%.
We say ‘temporarily’ because we are positive on the company’s efforts to subsidize the effects of the spin-off. One such attempt in this direction is the international expansion of its Taco Bell brand, the world’s largest Mexican-inspired restaurant chain.
Recently, the company announced that it has inked a definitive agreement with Casual Brands Group of Madrid, a franchising partner of Taco Bell since 2008, to add 45 restaurants across Spain and more than 900 jobs to the local economy. The vision is to open over 70 Taco Bell outlets in Spain by 2020, establishing it as the largest market in Europe.
Spain has been a lucrative market for Taco Bell over the last eight years and the company sees immense potential here on the back of persistent customer loyalty. It was also the first Taco Bell market in the world to serve beer and has now pioneered other promotional offerings, which is indicative of the brand’s ability to create exclusive area-specific specials leveraging on local insights.
Last month, Taco Bell revealed extensive brand evolution plans incorporating its first logo refresh in over 25 years, which followed the recently unveiled new restaurant design concepts. These initiatives are part of the company’s growth plan to establish 2,000 new restaurants globally, create 100,000 jobs in the U.S and become a $15 billion brand by 2022.
Though the company’s efforts to revive business along with various sales and digital initiatives bode well, the China business accounted for more than half of the company’s total revenue and has played a pivotal role in its solid performance over the last few years. Thus, it remains to be seen how profitable the endeavors turn out to be and whether they can uplift the currently Zacks Rank #5 (Strong Sell) rated company.
Stocks to Consider
Here are some well-performing restaurant stocks you can consider at the moment:
Bob Evans Farms, Inc.’s shares have returned 39.4% year to date while the broader industry grew 2.5%. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dave & Buster’s Entertainment, Inc. (PLAY - Free Report) – a Zacks Rank #1 company – has a positive record of earnings surprises in each of the reported quarters since its IPO in Oct 2014.
Domino's Pizza, Inc. (DPZ - Free Report) carries a Zacks Rank #2 (Buy) and is expected to witness a 23.1% increase in full-year 2016 earnings, while the industry is expected to grow 6.2%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>