Economic Landscape - Economic uncertainty and changing consumer preferences are causing significant disruptions in the food industry, affecting companies like Denny's and Kraft [1] - A combination of economic factors, including pressure on low-income consumers and health movements, is impacting these companies [2] Company Developments - Denny's announced a $620 million deal to go private with TriArtisan Capital Partners and others, following a 2.9% decline in same-store sales for the third consecutive quarter [3] - Yum! Brands is exploring strategic options for its Pizza Hut brand, which has experienced eight consecutive quarters of sales declines, down 1% [4][5] - Kraft's stock saw a slight increase of 0.2% before the market opened on Friday [5] M&A Activity - The private equity sector is actively seeking undervalued companies in the restaurant space for potential turnaround opportunities [4] - Papa John's faced a setback as Apollo Global Management withdrew its offer to buy the chain at a premium, coinciding with a 2.7% sales decline in North America [6] Strategic Moves - Starbucks sold a majority stake in its China business to Boyu Capital, valuing the segment at $4 billion, aiming to refocus on improving its U.S. operations [7]

Core Insights - Yum Brands reported disappointing revenue, with adjusted earnings per share of $1.44, missing Wall Street estimates of $1.46, and revenue of $1.93 billion, below projections of $1.94 billion [1] - The company faced challenges in the US market, particularly with KFC and Pizza Hut, which saw significant sales declines [1][7] Financial Performance - Net income for Yum Brands was $374 million, or $1.33 per share, in the second quarter, up from $367 million the previous year [2] - Overall same-store sales increased by 2% during the quarter [2] Segment Performance - KFC's global same-store sales rose by 2%, but US same-store sales fell by 5% [5][6] - Pizza Hut's global same-store sales decreased by 1%, with US same-store sales plunging by 5% [7][8] - Taco Bell reported a 4% growth in same-store sales in the US and internationally, benefiting from the successful re-launch of Crispy Chicken Nuggets [9][11] Strategic Initiatives - The company is attempting to boost sales through value options and new menu items, although these efforts have not resonated well with customers [5][7] - Yum Brands is rushing to implement new promotions to address the insufficient value message perceived by American customers [7] Operational Growth - Yum Brands increased its restaurant count by 3%, adding 871 new locations, primarily international KFC restaurants [10]