McDonald’s Corporation (MCD), Chipotle Mexican Grill, Inc. (CMG), Yum! Brands, Inc. (YUM): A Crazy Little Thing Called…

The bad

As much as Yum! expands domestically and internationally, the company still relies heavily on China for prosperity. Due to Avian flu outbreaks, the China Division revenue fell “41%” and this caused Yum!’s earnings per share to decrease “8%.” While the company is rebounding from these disturbances, China’s economy too is slowing up. The country’s GDP fell under predicted estimates and suggest that while China might be producing at a high rate, their goods and services are not being exported as high. These events serve as a wake-up call for Yum! that their focus may be misguided. While China has emerged as a dominant market, it does not mean that Yum! should place all their eggs in one basket. In true investor style, they need to diversify their portfolio.

The bottom line

The silver lining in the Asia fiasco for Yum! is that it allows them to redirect their focus to their other markets, particularly the U.S. With the release of 3 products, in each of their stagnant U.S. subsidiaries, this wacky, but intriguing company will continue to grow this year.

The article Crazy Little Thing Called… Yum! originally appeared on Fool.com.

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