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Yum! Brands Announces Measures to Combat Coronavirus Crisis

Zacks Equity Research

Yum! Brands, Inc. YUM is leaving no stone unturned to fight the coronavirus pandemic. The company has been taking several measures to combat the deadly virus. Following the news, the company’s shares increased nearly 5% yesterday.

 

The company will provide global medical relief fund for its “restaurant employee at company and franchise-owned stores who are diagnosed with or who are caring for someone diagnosed with COVID-19.” Employees, who are currently in self-isolation, of company-owned KFC, Pizza Hut, Taco Bell and The Habit Burger Grill restaurants in the United States will be paid salary.

 

The company is also focusing on ensuring the safety of food items by minimizing contact at KFC, Pizza Hut, Taco Bell and The Habit Burger Grill. This will help in protecting both its employees and customers. Moreover, Pizza Hut is now providing Contactless Delivery in the United States and 48 countries globally.

 

Yum! Brands is extending full support to its franchisees in their fight against the coronavirus crisis. The company has established a Global Franchise Health and COVID-19 support team to help KFC, Pizza Hut, Taco Bell and The Habit Burger Grill franchisees. The company is also looking after its franchises capital requirement and providing extra time for near-term payments if necessary.

 

Coronavirus to Hurt Sales

 

Previously, the company announced that it has witnessed sales recovery in those markets where coronavirus impacted first. However, the company stated that continued improvement cannot be guaranteed. As of now, the company expects first-quarter 2020 same-store sales to decline in the range of mid-to-high-single digits.

 

The company further added that it is very difficult to anticipate the impact of coronavirus on its future results. Nevertheless, the company expects second-quarter 2020 same-store sales to decline more than the first-quarter on account of increase in coronavirus cases.

 

Shares of this Zacks Rank #5 (Strong Sell) company have fallen 21.4% in the past month, compared with the industry’s decline of 20.9%. The decline can be primarily attributed to concerns regarding the coronavirus outbreak.

 

 

Restaurant Stocks to Buy in this Crisis Situation

 

Some better-ranked stocks worth considering in the same space include Domino's Pizza, Inc. DPZ, Chipotle Mexican Grill, Inc. CMG and Brinker International, Inc. EAT. All these stocks has a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Domino's Pizza and Chipotle has an impressive long-term earnings growth rate of 12.4% and 14.5%, respectively.

 

Brinker International current year earnings are estimated to witness growth of 8.8%.

 

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Click to get this free report Domino's Pizza Inc (DPZ) : Free Stock Analysis Report Brinker International, Inc. (EAT) : Free Stock Analysis Report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research