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The Pizza Festival ignites emotions. Inflation kicked in here as well
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The Pizza Festival ignites emotions. Inflation kicked in here as well

created Daniel KosteckiJanuary 18 2023

The internet and social media are red like the logo of a popular pizzeria chain after the publication of a new campaign advertising the Pizza Festival. Inflation did not miss this event, where prices increased significantly, and an offer outside the weekend and during the weekend was introduced, which had not happened before. The horror festival, as some call it, costs PLN 2023 with refills in 51,99 from Monday to Thursday and PLN 57,99 from Friday to Sunday. A year earlier, the Festival cost PLN 41,99 with a refill, which means inflation at the level of almost 24 percent. per week and 38 percent on weekends. As PH explains in social media, the increase in prices is primarily related to the increase in the prices of ingredients. It's really hard to be surprised here.

Without going into details what kind of flour pizza in a chain store is made of, 1 kg of wheat flour type 500 cost on average about PLN 1,91 a year ago. Today it is PLN 3,62, which means an increase of almost 90%. To this must be added energy prices and an increase in the cost of labor or renting premises. In economic terms, the lack of increases would be difficult to accept. Transferring part of the costs may, however, result in a decrease in sales, which will be the most interesting information when the Festival ends.


CHECK: How to invest in Fast Food chains?


Who owns the Pizza Hut brand?

The American company Yum! Brands is the owner of chain of pizzerias with a hat, KFC chickens and Taco Bell, known mainly from the movies. The company's shares are listed on the New York Stock Exchange under a ticker YUM. The company in the twelve months ended at the end of the third quarter of 2022 had USD 6,713 billion in revenue, which meant an increase of over 4%. on an annual basis. On Wall Street, it is forecast that in the next year this result may improve and the revenue will amount to almost USD 7,15 billion. Net Profit Yum! Brands amounted to almost USD 1,3 billion in the same period. YUM's share price peaked on December 31, 2021, when over $136 had to be paid. It is currently trading at $130 and is near an all-time high.

On Wall Street, according to the portal MarketScreen, the highest price target for YUM is at $160 and the lowest at $120. The average price target is $137,75. RBC Capital recently raised its price target from $128 to $132 and Goldman Sachs from $132 to $136. The company is listed with a price/earnings ratio of 28,8 and a forward P/E of 25,1 for 2023 and 22,1 for 2024.

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About the Author
Daniel Kostecki
Chief Analyst of CMC Markets Polska. Privately on the capital market since 2007, and on the Forex market since 2010.