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YUM! Brands' (YUM) Pizza Hut Expands Beer Delivery Services

Zacks Equity Research

YUM! Brands, Inc.’s YUM subsidiary brand Pizza Hut has announced the expansion of its category-first beer delivery program to approximately 300 restaurants. By mid-January, the program will be expanded in Florida, Iowa, Nebraska, North Carolina, Ohio, California and Arizona. .The company aims to increase the delivery services to 1,000 restaurants across new markets by 2019 summer.

Notably, this latest move aptly coincides with Super Bowl LIII. Most of the Americans plan to order pizza and beer at the Super Bowl party. Pizza Hut’s chief brand officer Marianne Radley said that “As the official Pizza Sponsor of the NFL, we've been celebrating football fans all season long, so it only makes sense for us to bring more customers the beloved combo of pizza and beer ahead of the Super Bowl.”

Strong Digital & Delivery Services to Drive Growth

The digital wave has hit the U.S. fast casual restaurant sector. More and more restaurants are deploying technology to enhance guest experience. Yum! Brands is also not far behind in the race. In the United States, the company is continuing its transformation process toward a single point-of-sale system.

Recently, Pizza Hut announced that it entered a definitive merger agreement with a leading online ordering software and service provider in the restaurant industry named QuikOrder. This buyout will be the largest one for Pizza Hut till date. It will allow Pizza Hut to deliver personalized online ordering services and accelerate digital innovation in more than 6,000 restaurants in the United States. As it is, in 2018, roughly half of Pizza Hut’s U.S. sales were processed through QuikOrder's platform.

In fourth-quarter 2017, this Zacks Rank #3 (Hold) company announced a partnership with online food delivery platform Grubhub to enhance online sales and delivery from its restaurants. Additionally, the company implemented various digital features in mobile and online platforms across all its brand segments to enhance guest experience.

A glimpse of the company’s price trend reveals that it has outperformed the industry in a year’s time. Shares of YUM! Brands have rallied 12.3% compared with the industry’s 5.8% growth.

Key Picks

Better-ranked stocks worth considering in the same space include Bojangles', Inc. BOJA, The Habit Restaurants, Inc. HABT and BJ's Restaurants, Inc. BJRI, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bojangles', Habit Restaurants and BJ's Restaurants has an impressive long-term earnings growth rate of 12.5%, 20% and 14.5%, respectively.

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