Fast Food Restructure Could Add Value To ETFs

We’re living in lean times in which everyone is scaling back and rethinking their old strategies; food and beverage exchange traded fund (ETF) components are no exception.

YUM Brands (YUM), which operates KFC, Taco Bell and Pizza Hut, is restructuring with an eye on the future. The strategy involves selling more company-owned stores to franchisees and eliminating jobs.

By restructuring the business, Yum says it will create more opportunities for growth and improve cost structure while operations will be more effective, reports Jonathon Blum, spokesman for the company. As of Wednesday, the company will have eliminated several hundred non-restaurant jobs, and shift a few hundred more by restructuring the U.S. businesses, reports the Associated Press.

Yum Brands says the restructuring was a project in the works all year and it is not in response to the economic downturn. Strong overseas sales, especially in China, appear to have offset weakness in the domestic market.

About 20% of the Taco Bell, KFC, and Pizza Hut stores in the United States are owned by Yum.

• PowerShares Dynamic Leisure & Entertainment (PEJ): down 26.1% year-to-date; Yum is 4.9%

Posted in Categories: Contributor, ETFs, External Research, Stocks, USA.

Subscribe by RSS Subscribe by Email