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Tricon Global Restaurants Discusses 2001 Expectations and Longer Term Growth Targets

2 min read
Opinions expressed by Entrepreneur contributors are their own.

Louisville, KY-Tricon Global Restaurants Inc.-franchisor of the KFC, Pizza Hut and Taco Bell brands-hosted its second biennial analyst/investor conference, during which executives reviewed 2001 earnings expectations and strategies. In 2001, the company expects that:

--will effectively complete its refranchising strategy, with the sale of about 300 restaurants to franchisees. At that time, the company will own approximately 20 percent of the total system restaurants. As in prior years, revenues will decline about 1 percent primarily as a result of the company's strategy to refranchise restaurants.

--will open 1,350 new global restaurants including 850 internationally.

--U.S. blended-same-store sales will grow 2 to 3 percent.

--system sales will be up 4 to 5 percent.

--international system sales will grow by 5 percent. Within this forecast, the company anticipates a roughly 2 to 3 point negative impact from foreign exchange rates. This is expected to be particularly impactful in the first half of 2001.

--franchise fees will grow 6 to 7 percent.

--restaurant margins will increase to more than 15 percent.

--expenditures on general and administrative costs will be flat to slightly higher in dollar terms year over year.

--the effective tax rate on operating earnings will be roughly 38 percent.

--interest expense will increase by 7 to 9 percent.

--ongoing operating earnings will increase by 7 to 8 percent.

--returns on invested capital will be at least 18 percent and cash flow prior to capital expenditures will be about $1 billion. -Business Wire

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