Yum Brands Sale Increase in China; Reports First Quarter Profit that Surpassed Analysts’ Estimates
There's good news for Yum Brands Inc., last year after struggling with supplier related scandals in China and growing local competition, Yum's operations in the nation has begun to rebound. Its growth is mainly due to a rising middle class.
Earlier reports said that Yum! Brands said it is planning to spin off its unit in China in 2016. The company posted profits in the Q1 surpassing analysts' estimations with sales figures growing in China.
Excluding some items in the first three months till March 19, the company reported profit of 95 cents per share. The company based in Louisville, Kentucky said it estimates operating profit will grow twelve percent this year, which is a boost compared to the earlier forecast of ten percent.
Yum has struggled in China but in spite of that Greg Creed, its Chief Executive Officer said in March, there is further opportunity to expand in the nation. The company can increase its number of restaurants from 7,500 to 20,000 in China.
However, even with the strong results some analysts feel it is a good idea for Yum Brand to spin off its China unit. Jennifer Bartashus , a Bloomberg Intelligence analyst said "It is still a good idea to spin it off. China presents a lot of opportunity, but it's not as large an opportunity as some people thought."