Yum Brands Plans Turnaround for Taco Bell

LOUISVILLE, Ky. -- Although Taco Bell owner Yum Brands Inc. is bracing itself for a slowdown as 2011 draws to a close, the company has predicted a stronger 2012 for the chain, thanks to a number of new items scheduled to be added to the quick-service restaurant chain's menu, according to a News & Observer report.

CFO Rick Carucci reported the outlook during a conference call with industry analysts last week. Although Yum, which also operates Pizza Hut and KFC, saw higher third-quarter profits due to strong sales in China and other overseas markets, U.S. sales declined across the board.

"We know that we need to turn around our U.S. business," Carucci said.

The company has reportedly blamed some of the drop on a lawsuit filed earlier this year that claimed Taco Bell tacos and burritos do not contain enough beef to warrant the name. The suit was later dropped, but the chain still saw significant negative publicity.

Yum is counting on new menu items being a way to reach its hoped-for turnaround, with several new Taco Bell items slated to arrive in restaurants early next year. David C. Novak, chairman and CEO of Yum, predicted they will cause "a significant uplift in our business."

While Novak did not list the upcoming items, he did note the company is "reinventing the taco."

The company did not offer specific sales and profit predictions for the coming year, but Carruci commented that it could be another "challenging year."

"The economic climate is very uncertain," he said. "Inflation could also rear its head, especially in the first half of the year."