The company faces risks from the ongoing Middle East conflict, potentially impacting sales and franchisee profitability in affected markets. A potential unfavorable resolution of the IRS audit for fiscal years 2013-2015 could result in significant tax liabilities. Foreign currency fluctuations negatively impact operating profit and earnings per share. The company's substantial debt obligations, while fixed in part, pose a risk if interest rates rise.
Financial Upside
The company's Good Growth Strategy aims to improve customer experience, unit economics, and growth. The KFC U.K. and Ireland restaurant acquisition presents a growth opportunity in a large, growing market. The sale of the Devyani investment generated significant proceeds. Strong operating cash flow allows for investment, dividend payments, and share repurchases.
