Louisville-based Yum Brands reports earnings for its fiscal first quarter on Wednesday. The following is a summary of key developments and analyst opinion related to the period.
Overview: Yum Brands, which operates the Pizza Hut, Taco Bell, KFC and Long John Silver's chains, has seen sales rise in recent months as consumers look for cheaper alternatives to sit-down restaurants.
The stronger dollar, though, has contributed to lower profits, and a slower gain in same-store sales in China in the company's fourth quarter led analysts to question whether the downturn will hurt the company's profit in 2009.
Yum has a huge presence in China, particularly with its KFC chain, which is now one of the most popular restaurant chains in the country. The company plans to continue building new locations in China.
Digital Access For Only $0.99
For the most comprehensive local coverage, subscribe today.
To boost sales in the United States, Yum added grilled chicken and a value menu at KFC.
By the numbers: Yum has not offered any specific guidance for the quarter, which ended March 21, but it has said it expects earnings per share to decline, excluding one-time items. Analysts polled by Thomson Reuters expect profit of 40 cents per share on revenue of $2.33 billion.
Analyst take: Thomas Weisel Partners analyst Fitzhugh Taylor said in a note to investors last week that he expects profit to fall in the quarter compared with a year earlier due to higher commodity costs and changes in currency exchange rates.
But he said there is "potential for upside" in 2009 if commodity costs fall, if general and administrative cost savings improve, or if there's a quicker-than-expected turnaround at KFC.
What's ahead: Yum has said it expects its earnings per share to rise in 2009 by 10 percent largely due to growth in sales and profits in the company's pivotal China division.
Stock performance: Shares fell nearly 16 percent during the quarter and 19 percent in the last 52 weeks.