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Yum! Brands (YUM) Plans to Sell KFC Restaurants in Russia

·3-min read

Yum! Brands, Inc. YUM is planning to exit the Russian market completely. The company is in advanced discussion with a local buyer to sell its KFC restaurants and franchise rights in the country. However, the financial terms of the deal have been kept under wraps.

The company opened its first KFC restaurant in Russia in 1995 and currently has approximately 1,000 stores in the country. The company announced that it has stopped all investments, restaurant developments and operations in the country. In May, YUM sold its Russian Pizza Hut franchises to a local operator.

Western companies are winding up their Russian business in response to the country's invasion of Ukraine. In May, McDonald's Corporation MCD reached a sale and purchase agreement with its current licensee Alexander Govor. Last month, McDonald's stores opened under new branding.

Stock Performance

Shares of this Zacks Rank #2 (Buy) company have fallen 0.4% in the past year, compared with the industry's decline of 18.2%. The company has been benefiting from continued focus on off-premise channels, strategic investments in digital technology and refranchising efforts. It has implemented various digital features in mobile and online platforms across all brand segments to enhance the guest experience.

Despite the pandemic-induced challenging environment, the company impressed investors with robust same-store sales growth in first-quarter 2022. The company delivered same-store sales growth of 3%. At KFC International and Taco Bell, same-store sales rose 3% and 5%, respectively, during the quarter. The company has been gaining from a recovery in emerging markets. Excluding China, same-store sales at both KFC Division and Pizza Hut International were up 10%.

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Other Key Picks

Some other top-ranked stocks in the Zacks Retail-Wholesale sector are Dollar Tree Inc. DLTR and BBQ Holdings, Inc. BBQ.

Dollar Tree sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 13.1%, on average. Shares of the company have surged 65.9% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

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. BBQ Holdings has a long-term earnings growth of 14%. Shares of the company have declined 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.

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