YUM – Market expectations are for record-high Uniform ROA, but management has concerns about their initiatives, operating profit, and growth

• • • Yum! Brands, Inc. (YUM:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 25.8x Uniform P/E, implying fairly bullish expectations for the firm. However, management has concerns about their initiatives, operating profit, and growth
    • Specifically, management may be exaggerating their satisfaction with the initial results of the Hut Rewards loyalty program launched in August, and may lack confidence in their easy brand initiatives. Additionally, they may be concerned about the timing difference between the refranchising of their restaurants and the associated G&A savings, which led to a 6%-7% negative impact on operating profit, and may lack confidence in the sustainability of new unit growth