Yum! Brands Forecasts Growth in India

LOUISVILLE, Ky. ( TheStreet) -- Yum! Brands ( YUM) sees strong growth potential for its restaurant concepts in India next year.

The chief of Yum's Indian operations said Monday he expects revenue to grow between 35% and 45% in 2011.
Taco Bell and KFC

Comparable same-store sales, or sales at stores open at least one year -- a closely watched metric in the restaurant industry -- should increase in the mid-teen percentages, Niren Chaudhary told Reuters at the World Economic Forum's India summit.

Chaudhary expects Yum's Indian operations to break even next year.

"We feel that we have laid the foundation in terms of our business strategy, people capability, in terms of our processes and so on," Chaudhary told the newswire.

"So 2011 is going to be a transformational year in which I personally expect that we will beat all of the metrics of 2010. So we will grow faster, we will build more stores and hopefully get more recognition for the brand," he said.

Fast food behemoth McDonald's ( MCD) did not specifically underscore its own success in the subcontinent, but said earlier this month that comps in its Asia/Pacific, Middle East and Africa region grew 5.3% in October, after pushing up 8.1% in the third quarter.

Yum!, which operates fast-food chains under the KFC, Pizza Hut and Taco Bell brands, recently posted a 2.9% increase in quarterly earnings to $2.86 billion, or 74 cents per share, on revenue of $357 million.

>>Restaurant Stocks: Earnings to Watch

Yum! said comps grew 6% in China and 1% in the U.S. and its international division. In the U.S., comps grew 8% at Pizza Hut and 3% at Taco Bell. Comps at KFC fell 8%.

>>Yum's Delicious Outlook: China Watch

"We continue to make progress at all three divisions and are especially pleased with the continued strong results from our China business," said CEO David Novak. "The combination of high-return, new-unit development, same-store-sales growth and increasing margins drove operating profit growth of 23% in China for the quarter."

Acceleration in emerging markets like Russia, France and Vietnam, as well as more established European markets seems on track, noted Stifel Nicolaus analyst Steve West. Sales improvement in China should also continue to build.

Yum! shares gained 0.2% Monday morning to trade at $50.88.

-- Written by Miriam Marcus Reimer in New York.

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