CNBC Excerpts: Yum Brands CEO Greg Creed and Yum China CEO Mickey Pant on CNBC’s “Squawk on the Street” Today
Following are excerpts from the unofficial transcripts of CNBC interviews with Yum Brands CEO Greg Creed and Yum China CEO Mickey Pant today on CNBC's "Squawk on the Street." Following are links to video of the interviews on CNBC.com: http://video.cnbc.com/gallery/?video=3000564260 and http://video.cnbc.com/gallery/?video=3000564283.
All references must be sourced to CNBC.
CREED ON GROWTH
I THINK ALL ISSUES ARE BEHIND US. I THINK THE BIG STORY IS GROWTH, WHETHER IT'S URBANIZATION IN CHINA, WHETHER IT'S THE INFRASTRUCTURE, WHICH BEING ABOUT INFRASTRUCTURE, IT'S RAILROADS, IT'S AIRPORTS, IT'S TRAIN STATIONS AND THEN MALLS. THERE'S 1250 MALLS GOING TO OPEN. ALL OF THOSE ARE OPPORTUNITIES FOR US TO BUILD NEW RESTAURANTS AND GROW OUR FOOTPRINT IN CHINA SO WE THINK THERE'S UNLIMITED GROWTH POTENTIAL IN CHINA.
CREED ON THE THIRD QUARTER
IF YOU LOOK AT OUR THIRD QUARTER, WE HAD A GREAT QUARTER FOR TACO BELL. WE HAD A GREAT QUARTER FOR KFC. THEY LOOK EVEN BETTER NOW THAT OUR COMPETITORS HAVE POSTED THEIR NUMBERS. HONESTLY, WE BELIEVE WE CAN GROW 7% FOR ALL THREE BRANDS ACROSS THE WORLD BECAUSE WE'RE STILL IN EMERGING MARKETS AND WE STILL GET THE GROWTH FROM CHINA.
CREED ON TACO BELL
I DO THINK THERE'S A CHANCE. TACO BELL HAS MOMENTUM BOTH IN SAME STORE SALES AND NEW UNITS AND WE HAVEN'T EVEN BEGUN TO SCRATCH THE INTERNATIONAL BUSINESS. WE'RE ONLY IN 22 COUNTRIES WITH 300 RESTAURANTS. IF YOU THINK ABOUT KFC WE'RE IN 125 COUNTRIES WITH 16,000 RESTAURANTS SO TACO BELL HAS HUGE GLOBAL UPSIDE POTENTIAL.
CREED ON PIZZA HUT
WE'VE GOT A LOT OF WORK TO DO ON PIZZA HUT. WE KNOW THAT. I WOULD SAY TWO YEARS AGO, KFC U.S. EVERYONE SAID WAS DOWN AND OUT FOR THE COUNT. WE JUST DELIVERED A PLUS SIX IN Q3 WITH FOUR OTHER TRANSACTIONS. IF WE CAN DO IT TO KFC WHICH WAS IN A LOT WORSE SITUATION, WE CAN DEFINITELY TURN AROUND PIZZA HUT.
CREED ON THE ELECTION
CREED: I'D SAY THE CONSUMERS, THEY'RE IN A WAIT-AND-SEE SITUATION RIGHT NOW. NEXT WEEK THERE'S A LOT TO SEE WHAT HAPPENS. I DON'T THINK THOUGH EVEN WHAT HAPPENS NEXT WEEK, WHICHEVER WAY IT TURNS OUT, I DON'T THINK THE CUSTOMER WILL COME OUT AND OPEN UP THEIR POCKETS
FABER: WHY NOT?
CREED: I THINK PEOPLE ARE JUST CAUTIOUS RIGHT NOW. I DON'T THINK IT'S JUST THE ELECTION. SO I THINK PEOPLE -- BUT YOU KNOW WHAT, GREAT BRANDS THAT ARE TRULY DIFFERENTIATED THAT OFFER A DISTINCT POINT OF DIFFERENCE, LIKE WE DEMONSTRATED IN Q3, THEY CAN BE SUCCESSFUL.
PANT ON 20K RESTAURANTS
WE'VE GOT ABOUT FIVE STORES FOR EVERY MILLION OF POPULATION AND THAT'S UNDER PENETRATED. IN OUR VIEW WE CAN TRIPLE THE NUMBER OF STORES SO WE THIS AS A MARKET IN THE LONG TERM. WE THINK WE'LL HAVE MORE YUM BRAND STORES IN CHINA THAN WE HAVE IN THE UNITED STATES, SO WE CAN GET 20,000 RESTAURANTS HERE.
PANT ON GROWTH
LAST QUARTER WE REPORTED SAME-STORE SALES AT MINUS 1. PRIOR TO THAT FOR FOUR STRAIGHT QUARTERS, FROM Q3 OF LAST YEAR AND Q4 OF LAST YEAR AND Q1 AND Q2 OF THIS YEAR KFC ACTUALLY RAN POSITIVE COMPS. FOR THE FIRST THREE QUARTERS THIS YEAR KFC is RUNNING PLUS 4 ON SAME-STORE SALES. SO THERE HAVE DEFINITELY BEEN BUMPS ALONG THE ROAD IN THIS LONG JOURNEY BUT WE SEE THE OPPORTUNITIES AS BEING FAR OUT WEIGHING THE RISKS OF BEING IN CHINA.
PANT ON THE CONSUMER
I THINK THAT THE CONSUMER IS ALIVE AND WELL.OUR OWN SALES AS I MENTIONED THE KFC HAVE GROWN, EVEN PIZZA HUT, WHICH IS A RELATIVELY MORE EXPENSIVE CONCEPT COMPARED TO FAST FOOD, IN 2015 WHEN THE ECONOMY WAS REPORTEDLY VERY DIFFICULT, WE GREW OUR SYSTEM SALES BY 10%. SO WE BELIEVE THERE'S BUSINESS TO BE HAD.
PANT ON THE US CHINA RELATIONSHIP
WE'VE RIDDEN MANY, MANY CHANGES OF ADMINISTRATION ON BOTH SIDES OF THE WORLD, IN THE UNITED STATES AS WELL AS IN CHINA IN THE PAST. SO THERE MAY BE BUMPS ALONG THE ROAD, BUT OVERALL WE SEE CHINA AND THE U.S. AS HAVING TOO IMPORTANT A PARTNERSHIP FOR ANYONE TO TAKE LIGHTLY OR MAKE SIGNIFICANT CHANGES TO WITHOUT A MAJOR DISRUPTION. SO IT'S GOOD FOR BOTH COUNTRIES TO KEEP TALKING AND KEEP GOING.
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