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Yum Brands Expects to Return $13.5 Billion to Shareholders by 2019

October 11, 2016

Yum! Brands Inc. Restaurants Ahead Of Earnings FiguresYum! Brands Inc. Restaurants Ahead Of Earnings Figures
Taco Bell and KFC are some Yum Brands owned restaurant chains. Bloomberg — Getty Images

Yum Brands, owner of Pizza Hut, KFC, and Taco Bell chains, said on Tuesday it expects to return as much as $13.5 billion to shareholders by 2019 as part of a program started last year, sending shares up as much as 3.8%.

Yum said it will increase franchise restaurant ownership to 93% from the current 77% when its China business is spun off on Oct. 31.

The company aims to be least 98% franchised by the end of 2018. Shifting to independent owners will enable Yum to reduce risk and lower costs and move to a greater dependence on more stable franchise and license fees.

The company said it had bought back about $5.5 billion of its shares as a part of a previously announced $6.2 billion capital return program, reducing its share count by about 16%.

Yum also said it would expand the plan, resulting in a total return of $13.5 billion to shareholders, including dividends.

The company said it will reduce annual capital expenditure to about $100 million in 2019 from about $500 million in 2015 and plans to reduce general and administrative expenses by a cumulative $300 million by fiscal 2019.


Yum‘s China business will begin trading on Nov. 1 on the New York Stock Exchange with the ticker symbol YUMC. The new company, Yum China Holdings, will become a licensee of Yum Brands in mainland China and will have exclusive rights to KFC, Pizza Hut, and Taco Bell.

Yum last week reported its first same-store sales drop in five quarters in China, blaming anti-U.S. protests after an international court rejected China’s claim to historic rights in the South China Sea.

Shares in Yum were up 2% at $89.15 after hitting a session high of $90.68. Up to Monday’s close, the stock had risen about 20% since the start of the year.