Yum Brands will sell A&W, Long John Silver's

LOUISVILLE (AP) — Yum Brands, which operates KFC, Pizza Hut and Taco Bell, plans to sell two of its other chains — Long John Silver's and A&W.
The company, based in Louisville, Ky., said Tuesday that it wants to focus on its Taco Bell, Pizza Hut and KFC businesses in the U.S. and abroad. Long John Silver's and A&W All-American Food restaurants don't fit its long-term strategy.

Yum acquired the two chains in 2002 for $320 million. They account for 1,630 of the company's more than 37,000 restaurants worldwide. However, the chains have a minimal presence outside the U.S. and no sites in China, a critical market for the company.

READ: Yum's press release

Yum's profitability has improved greatly since putting an emphasis on overseas business. In 1998, when Yum! Brands was spun off from PepsiCo, 22% of its profits came from outside the USA. Today, about 65% of the company's profit is from overseas.

Like many consumer companies, Yum expanded aggressively internationally to win the business of growing middle classes. Yum opened an average of four restaurants every day overseas during its 2009 fiscal year.

The company reported in its last quarter that net income grew 7% on surging international sales despite a slight downturn U.S. sales. The company said earlier this month that it is on track to deliver 14% growth in earnings per share for the year based on its success overseas.

The company said it doesn't expect the sale of the chains to have a material effect on its earnings or cash flow.

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