Yum! Brands, Inc.’s YUM Pizza Hut recently entered into a franchise agreement with Americana Restaurants to open stores across Saudi Arabia. The initiative supports cashing in the demand for quality pizzas and omnichannel restaurant experiences in the Saudi market.
Per the agreement, the Middle East franchisee Americana will develop and operate Pizza Hut restaurants across the region (excluding Jeddah city). This includes likelyhood openings of up to 30 Pizza Hut locations (by early 2023) and approximately 100 branches (over the next three years).
Apart from unit expansion, the company also emphasized on deploying technology to enhance customers’ order on-the-go experience. Americana will roll out innovative technology solutions with respect to “Super-App”, QR codes, and self-service Kiosks.
Ewan Davenport, Pizza Hut — YUM managing director — the Middle East, Turkey and Africa, stated, “We are confident that the partnership represents the beginning of an exciting growth journey for us in KSA and we will endeavor to win the hearts of our customers by serving delicious pizzas, starting from the first branch in Riyadh, Al Narjis area, whilst also continuing to offer product innovation and relatable, real, and lighthearted fun.”
Focus on Expansion
YUM! Brands continues to focus on expansion efforts to drive growth. Considering its existing footprint of more than 50,000 restaurants worldwide, YUM! Brands believes it can nearly triple its global presence over the long term. During the first quarter of 2022, the company opened 997 gross units. The company reported solid developments in the KFC and Pizza Hut International divisions with gross unit openings of 587 and 283, respectively. The company reported solid developmental contributions from its brands in India, Asia, the Middle East and Latin America. The company intends to focus on master franchise agreements in Brazil (Taco Bell) and Spain (Taco Bell) and an international growth alliance with Telepizza (to accelerate the development of Pizza Hut in key European markets) and consolidate franchisees in Latin America to drive growth.
In the past year, shares of Yum! Brands have declined 0.4% compared with the industry's fall of 18.2%.
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Zacks Rank & Key Picks
Yum! Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Dollar Tree Inc. DLTR, BBQ Holdings, Inc. BBQ and Arcos Dorados Holdings Inc. ARCO.
Dollar Tree sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 13.1%, on average. Shares of the company have gained 65.9% in the past year.
The Zacks Consensus Estimate for Dollar Tree’s 2022 sales and earnings per share (EPS) suggests growth of 6.7% and 40.5%, respectively, from the year-ago period’s levels.
BBQ Holdings carries a Zacks Rank #2 (Buy). BBQ Holdings has a long-term earnings growth of 14%. Shares of the company have decreased 37.2% in the past year.
The Zacks Consensus Estimate for BBQ Holdings’ 2022 sales and EPS suggests growth of 46.1% and 67.6%, respectively, from the year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2. Arcos Dorados has a long-term earnings growth of 34.4%. Shares of the company have risen 8.2% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 16.6% and 83.3%, respectively, from the year-ago period’s levels.
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