Backed by an impressive track record of promoting sports and healthy lifestyle in communities across the Chinese Mainland, Yum China Holdings, Inc. YUMC has been recently named the official retail food services sponsor for the Olympic and Paralympic Winter Games Beijing 2022 (“Beijing 2022”). The company will also become the official sponsor of the Chinese Olympic Committee through the end of 2024.
Following the announcement, shares of the company rose 1.2% during the trading session on Jul 20. Previously, it was associated with the 2019 Tennis Masters, 3×3 basketball competitions and city marathons.
Per the agreement, Yum China will be offering food and refreshment services for visitors and athletes through KFC, Pizza Hut and other brands.
The sponsorship rights also allow the company to use the Olympic marks, imagery of the Beijing 2022 Olympic Winter Games and marks of the Chinese Olympic Committee for advertisement and promotional purposes. Notably, the company intends to launch a series of Olympic-themed marketing campaigns to promote the sporting event.
CEO of Yum China, Joey Wat stated, “At Yum China, we are committed to leveraging our brand influence, strong offline and online network, as well as over 250 million members to promote the Olympic values of Excellence, Respect and Friendship.”
Coming to price performance, shares of Yum China have gained 10.8% so far this year against the industry’s 6.4% decline. Notably, the company has been benefiting from continual menu innovation and digitization efforts. Moreover, it has adopted a high-grade delivery strategy that covers collaborating with aggregators to source traffic and fulfills orders by the company’s KFC riders. This is expected to help the company drive volume and leverage the extensive network to control quality. Bottom-line estimates for 2020 have increased over the past 30 days, depicting analysts’ optimism surrounding the stock’s earnings growth potential.
Zacks Rank & Other Key Picks
Yum China currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Other top-ranked stocks in the same space include Dine Brands Global, Inc. DIN, Papa John’s International, Inc. PZZA and Domino’s Pizza, Inc. DPZ, each sporting a Zacks Rank #1.
Earnings for 2021 for Dine Brands are expected to surge 206.6%.
Papa John’s has a three-five-year earnings per share growth rate of 8%.
Domino’s has a trailing four-quarter earnings surprise of 18.6%, on average. The company’s earnings beat the Zacks Consensus Estimate in the last four quarters.
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