On the Line: Yum! Brands CEO David Novak
The restaurant business is notoriously inconsistent, but Yum! Brands has managed to buck the trend. Chairman and CEO David Novak attributes this to the global growth the fast-food chain gets from diverse brands like Taco Bell, Pizza Hut and Kentucky Fried Chicken.
That diversity offers Yum! the chance to expand around the world, Novak told Cramer. In fact, Yum! is the number-one retail developer in the world – ahead of McDonald’s, Starbucks and Wal-Mart – opening one restaurant a day in China, Novak said.
That diversity also delivers “consistent earnings power,” the CEO said, adding that Yum! is expecting its sixth straight year of at least 12% earnings growth.
Novak isn’t worried about the food industry’s move toward healthier products either. “Our food really tastes good in the classic sense,” he said, “and that’s what consumers are really looking for.”
Still, Novak said Yum!’s menus are much broader than people realize, but “I think we have to do a better job of communicating it.”
“We do have an opportunity to give consumers more choice, and we definitely will over time,” Novak said.
As far as Cramer is concerned, if there is any pullback in Yum!, the stock is a buy.
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