Global-minded Yum to sell Long John Silver, A&W

By Dow Jones Newswires
Posted Jan. 18 at 10:17 a.m.

Yum Brands Inc.¬† said it’s shopping for a buyer for its Long John Silver’s and A&W All-American Food Restaurants to focus on international expansion.

The company, which also operates Taco Bell, Pizza Hut and KFC, said the chains don’t fit in with its long-term growth strategy, and it doesn’t expect the sale to have a material effect on its ongoing earnings or cash flow.

Shares edged up 1.6 percent, to $48.59, in morning trading and are up 36 percent  in the last year.

Facing a ho-hum forecast for the U.S. market, Yum has eyed international expansion as a driver of growth, particularly in China. Consumer confidence has continued to improve there, and the company stands to gain from the Chinese government’s decision to let the yuan appreciate, though rises in commodity and labor costs could hamper that benefit.

Yum, which was spun off from PepsiCo Inc.  in 1998, gets about 65 percent of its profit from China and its international division, up from 22 percent at the time of the breakup. It expects that percentage to grow to 75 percent by 2015.

Yum, the world’s largest restaurant company with more than 37,000, said Taco Bell accounts for about 60 percent of its profit in the U.S., followed by Pizza Hut and KFC. The Long John Silver’s and A&W All-American Foods Brands account for a total of 1,630 restaurants, all of which are owned and operated by franchisees.

The company reported in October that its fiscal third-quarter earnings rose 6.9 percent, and the fast food company raised its full-year outlook again.

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