Good Evening! On Wednesday, US equities surged after the Federal Reserve decided to maintain interest rates at their highest level in 22 years.
The S&P 500 increased by 1.05%, while the Dow Jones saw a 0.67% gain. The Nasdaq Composite had another excellent day, rising by 1.64%.
YUMMY EARNINGS!
Yum! Brands (YUM), a large fast food corporation, released its Q3 earnings results, which exceeded expectations in terms of profits per share but fell short on sales. Pizza Hut’s underwhelming sales adversely impacted the overall figures, although KFC and Taco Bell bolstered revenues for Yum! Brands.
- Revenue: $1.71 Billion vs. $1.77 billion expected
- KFC Same-Store Growth: 6% vs. 5.72% Expected
- Taco Bell Same-Store Growth: 8% vs. 6.65% Expected
- Pizza Hut Same-Store Growth: 1% vs. 2.16% Expected
- Earnings Per Share: $1.44 vs. $1.27 Expected
The Favorites! The success of the KFC chain in China, where it generates 25% of its revenues, continues to exceed expectations. During the third quarter, there was a 16% increase in overall restaurant sales in China, while sales remained unchanged in the U.S. Taco Bell maintains its strength in the U.S. market as wealthy customers choose more affordable dining options during periods of financial constraint. CEO David Gibbs stated, “We see really consistent 2% to 3% transaction growth across all income levels.”
What else was added to these “Yum” earnings? In the quarter, digital sales, which account for 45% of total sales, exceeded $7 billion, playing a crucial role in enhancing loyalty programs.
GETTING FULL CUSTODY
Disney announced its acquisition of Comcast’s 33% ownership share in the streaming platform Hulu. Here is the deal! Disney is obligated to pay Comcast’s NBCUniversal a minimum of $8.61 billion by December 1st, which is the minimum amount that Comcast is entitled to for the streaming service.
The starting point? The two businesses will engage in discussions to determine the full valuation of Hulu. Currently, Disney has a majority stake of two-thirds in Hulu, while Comcast’s Universal controls the remaining portion. During the 2019 agreement, Hulu was assessed with a guaranteed minimum equity value of $27.5 billion, which translates to about $9 billion for the 33% ownership position.
Comcast allegedly considered acquiring Disney’s controlling interest in the past but ultimately decided against it owing to worries about content rights. This is because Disney has a significant amount of control over Hulu’s programming.