Tricon, Pizza Hut's parent, unveils aggressive growth strategy for ''02

March 24, 2002

NEW YORK -- At its annual Wall Street briefing in New York on Dec. 13, David Novak, CEO of Tricon Global Restaurants Inc., parent company of Pizza Hut, revealed the company's aggressive plan for international growth in 2002.

Over the course of next year, the company expects to open a total of more than 1,400 Pizza Hut, Taco Bell and KFC stores -- as well as stores bearing all three brands. About 1,000 of those stores will be located in international markets, where Tricon wants to double its business over the next eight to 10 years. It also reported that nearly 25 percent of its 2001 profits are expected to come from international sales.

Currently, there are about 4,200 Pizza Hut stores outside the U.S.

Novak also discussed the company's new customer service-improvement initiative, called "Customer Mania." According to Dow Jones Newswires, he said, "Customers tell us we're not running restaurants as well as we should be." To fix the problem, he said the company's 725,000 crew workers will be re-trained for their positions each quarter. Novak added that Tricon's customers have told the company its stores and staffs don't score well in terms of service, attentiveness and cleanliness.

Tricon plans to open about 350 dual- and tri-concept stores this year. Novak stated that the multi-brand properties have given the company a better return on investment than have single-brand properties.

Despite an unexpected drop in same-store sales at Pizza Hut this year, Novak said Tricon will meet earnings expectations for 2001 of $3.18 per share. Next year, however, the goal is to boost EPS 13 percent, to $3.53 to $3.63 per share.

Much of the earnings growth will hinge on how closely Tricon comes to its goals for same-store sales increases in '02. Saying he'd like to see the company's stores match the per-store average of $1.1 million set by Burger King, Novak knows that at least two of the company's brands have their work cut out for them. The average Pizza Hut grosses about $700,000 annually, and Taco Bell and KFC stores average $900,000 and $800,000 respectively.

Topics: Public Companies

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