In today’s world, if a company wants to expand, it needs to think internationally. The food industry is selling its wares on the international forums, and strong numbers from the emerging markets is bringing a nice boost for a fast-food giant and related food industry exchange traded funds (ETFs).
Yum! Brands’ (NYSE: YUM) reported impressive sales growth in China and emerging markets, with an expansion of 15% and 10%, respectively, writes R.J. Hottovy for Morningstar. The company’s international division, markets outside of the United States and China, expanded by 17.6%. [Craving Fast Food? Here Are 4 ETFs.]
Yum! also estimates a 12% growth for the year, which analysts believe is consistent with near-term expectations as a result of higher food commodity costs and labor inflation in China.
Morningstar projects that the China market will continue to bring low- to mid-single digit sales growth.
Yum!, which owns Pizza Hut, Taco Bell, and KFC, is the largest name brand in the restaurant business, with 37,000 restaurants in 110 countries, comments Stephen Foley for The Independent. As a larger middle class starts to emerge, China is becoming the main foreign market for Yum! restaurants.
However, in the United States, menu changes and innovations are being implemented to stop or at least slow revenue losses.
For more information on the food industry, visit our food & beverage category.
- PowerShares Dynamic Food & Beverage (NYSEArca: PBJ): YUM is 4.8%
- PowerShares Dynamic Leisure & Entertainment (NYSEArca: PEJ): YUM is 4.7%
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.