YUM! Brands to Invest in GrubHub

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YUM and GrubHub brand large pizza

In early February, the stock price of GrubHub increased by an impressive 29 percent to US$89.04 per share after the company announced a US$200 million partnership with Yum! Brands and better than expected fourth quarter results.Yum! Brands is the parent company for Pizza Hut, KFC and Taco Bell and is the fourth- largest private employer in the United States.

Based on the agreement, GrubHub will be expanding its services to offer pickups and delivery services to customers at their doorsteps. GrubHub will also be working with Franchisees to implement ordering online and pickup services from Yum Brand subsidiaries. The multi million-dollar agreement also sees the appointment of Pizza Hut’s President, Arthur Starrs, to GrubHub’s Board of Directors for a period of three years .

You may be wondering what would make GrubHub stand out from other competing delivery business. GrubHub is expanding their coverage of delivery to include additional cities to the 900 it currently serves. GrubHub increased its restaurant count in two years; from 40,000 to 80,000 and is available in 1300 cities at the moment and looks to provide their service to a majority of all KFC and Taco Bell locations across the US in 2018.

GrubHub reported fourth quarter earnings of US$0.36 cents per share and a revenue of US$205.1 million. On the other hand, Yum! Brands stock price decreased by 4.7 percent following the announcement but their fourth quarter review was nonetheless better than expected.

Earnings per share for the quarter increased by 53 percent to US$1.26 and net income rose to US$436 million from US$303 million the previous quarter. Regrettably, total revenue for the year fell by 16.4 percent to US$1.58 billion.


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