Yum Brands Adds Activist Investor From Corvex To Board

The company will start reporting monthly same-store sales, beginning with October’s numbers after the close on November. 12.

Meister called for Yum to cut its China business in order to create more shareholder value and form an entity that will be “levered to the endless growth to the Chinese middle class”.

Ongoing volatility in China and a strong dollar led Yum! The average twelve-month target price among analysts that have issued ratings on the stock in the previous year is $86.00.

Meister, who heads hedge fund Corvex Management, has urged Yum to separate its 6,900-restaurant China division, which contributed 57 percent of the company’s overall revenue and 54 percent of its operating profit in the latest quarter.

On Thursday, the company further said it expects full year adjusted EPS growth to be flat or land in low single digit percentages compared to last year. The owner of KFC, Pizza Hut and Taco Bell smoked its competition, largely because of its years-long success in China. Brands on Thursday said his stake now represents about 5% of the company’s common stock. Prior to founding Corvex, Mr. Meister served from 2002 to 2010 in a range of leadership roles within the organization headed by Carl C. Icahn, including as Chief Executive Officer and Vice Chairman of the general partner of Icahn Enterprises LP (NYSE: IEP).

Yum! Brands adds in the press release that they also expect foreign exchange headwinds to negatively impact their full-year EPS growth rate by one to two percentage points. Brands, Inc., based in Louisville, Kentucky, has over 41,000 restaurants in more than 125 countries and territories.

But Mark Kalinowski, analyst with Normura, said that Yum and its three large brands were constructed 20 years ago as a spinoff from PepsiCo Inc. and that it needs to be restructured to adapt to modern times. Outside the United States, the Yum! YUM operates in five segments: YUM China, which comprises all operations in mainland China; YUM India, which includes all operations in India, Bangladesh, Nepal and Sri Lanka; The KFC Division, which contains all operations of the KFC notion beyond China Department and India Office; The Pizza Hut Division, which contains all operations of the Pizza Hut notion beyond China Division and India Division; and the Taco Bell Department, which contains all operations of the Taco Bell notion outside India Department. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof.

October 15, 2015 Yum!

The company also updated its outlook for 2015.

In other news, SVP Jonathan David Blum sold 1,689 shares of the company’s stock in a transaction on Tuesday, September 1st. A few investors believe Yum will be broken up, but the parts may be worth no more than the whole.

Other equities research analysts also recently issued reports about the stock.