This Thursday, 07/17/08, Yum! Brands, Inc.  (Public, NYSE:YUM) will host its Q2 Earnings Call.

Yum! Brands, which owns, operates, licenses and franchises the KFC, Pizza Hut, Taco Bell, LJS and A&W brands on an international level, has fallen -12% since May first.

What I like about YUM brands is its so recession proof. Where else can you get a meal for under $5? Not the grocery store these days. But their international exposure is where the growth is.

One of Yum! Brands key business strategies are to drive profitable international growth. In 2007, operating profits were more than $480 million. Mainland China is their number one market for new company restaurant development worldwide. In 2007, operating profits for the China Division (mainland China, Thailand and KFC Taiwan) were more than $375 million.

YUM 1 Year Chart:

Yum!’s KFC brand was the first fast food restaurant chain to enter China in 1987. In 2002, KFC opened the first-ever drive-thru restaurant in China. Today, KFC is the number one quick-service restaurant brand in China. Yum! China has more than 2,200 KFC restaurants in 450 cities in mainland China (Q1 2008).
Pizza Hut was the first restaurant chain to introduce pizza to China in 1990. Today, Pizza Hut is the number one casual dining brand in China. Yum! China has more than 360 Pizza Hut casual dining restaurants in more than 80 cities within mainland China. In addition, there are nearly 60 Pizza Hut Home Service delivery units in mainland China (Q1 2008).

Here are the estimates going into the call:

Looking back since 2006, YUM hasn’t disappointed on an earnings call. Chances are they will beat .42 cents based on their prior performance. I don’t like Q3 estimates of .56, it seems a little high, in spite of that, the summer months of Q3 is typically the companies best quarter.

A look at a stock chart of key industry players is quite revealing – Fast food is leading the pack as share performance of McDonald’s, Burger King , and Yum! Brands are ahead of the S&P over the past year.

So pickup some shares of YUM, grab yourself a bucket of chicken, and watch the money roll in.

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