3 Companies To Watch That Report Earnings Tomorrow – October 4, 2016

Yum Brands (YUM): Popular fast food chain, Yum Brands, is scheduled to report Q2 earnings Wednesday after the market closes. While the quick-serve industry has rebounded in recent years, Yum’s results have been mixed. Strength in the third quarter is expected to come from strong comps from all major outlets: Taco Bell, Pizza Hut, and KFC. Taco Bell has been hugely successful with its breakfast offerings while menu innovation, increased efficiency, and digital initiatives have boosted Pizza Hut. KFC is steadily improving as well, on the back of renovated restaurants and healthier menu items. Yum, China has been on the rebound, recording a 3% increase in system sales (excluding currency impact) and flat SSS in the second quarter.

Monsanto (MON): The biggest news out of Monsanto this year came just last month when it officially accepted Bayer AG’s all-cash buyout offer of $66 billion. The deal is still being sorted, but will surely be a large topic during Wednesday’s earnings call. Despite higher demand for areas in which MON operates, such as crop protection, the development of new agricultural solutions and the rise of digital agriculture, the company remains exposed to various macroeconomic risks.  The global economic slowdown (specifically in China), decreased investments in the agricultural industry, lower agricultural prices and the continued strength of the U.S. dollar will likely drag down earnings again this quarter. Based on some of these continued concerns, Monsanto lowered FY 2016 guidance during its last quarterly report in June.

Constellation Brands (STZ): The summer quarter tends to be the strongest of the year for the alcoholic beverage distributors. Constellation Brands is expected to further benefit from its beer portfolio as demand continues to grow, specifically for imported beer. Net sales for beer increased 19% last quarter, primarily due to volume growth and favorable pricing. As for imported beer value, about 60% came from Mexico. The beverage company’s Mexican beer profile continues to perform best, with total revenues receiving a nice boost due to the popularity of Corona and Modelo. The wine business has also been growing rapidly (STZ is the largest premium wine company in the world), with brands like Robert Mondavi, Black Box and Dreaming Tree, and the recent acquisition of Meiomi. Wine and spirit sales increase 8% in the latest quarter. Despite ongoing strength, competition in this area is really starting to heat up.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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