FYI, this note is best read with the Wendy’s (WEN; Buy, $22.39) report we published earlier today, entitled “WEN: It is Called the “Most Important Meal of the Day,” After All…”
Ahead of Yum Brands’ (YUM; Buy) first-quarter earnings release — scheduled for before the market open on Wednesday, May 1st — we look at a key positive and a key risk surrounding YUM. Most importantly on the positive side of the ledger, based on our data-driven checks, we raise our Q1 same-store sales forecast for Taco Bell by one percentage point, to +5%, as we believe that brand’s momentum, innovation, and differentiation continue to pay off. Promotions during various parts of the first quarter included Steak Rattlesnake Fries, the Steak Rattlesnake Burrito, the return of the Naked Chicken Chalupa, and the return of Nacho Fries. Our Q2E same-store sales forecast is also boosted by one percentage point, to +4%, and that is not a bestcase scenario if the second quarter trends well. We’ll see…