Yum! Brands reports 5% sales drop in China in October, adding to investor concerns that business slowing in country
November 13, 2013
– Pizza Hut, Taco Bell, KFC parent Yum Brands says key sales measure falls in China for October
Yum Brands Inc., owner of the KFC, Pizza Hut and Taco Bell chains, said Tuesday that a key monthly sales figure fell 5 percent in its China markets in October, adding to investor concerns that business is slowing there.
China is a critical region for Yum, which is the biggest Western fast-food operator in the country. The country accounts for more than 40 percent of the company's operating profit but sales have been slowing at its KFC restaurants there after a chicken safety issue last year and bird flu scare earlier this year drove customers away. In October, Yum linked its lower-than-expected third-quarter results to disappointing results in China and cut its full-year earnings forecast.
The Louisville, Ky., company said Tuesday that revenue from KFC stores open at least a year fell 7 percent in China last month. However, a 10 percent gain at its Pizza Hut stores there helped mitigate some of the losses for a combined drop of 5 percent.
So-called "same-store sales" are considered a key measure of financial performance as they strip away the impact of recently opened or closed stores. Yum Brands has more than 40,000 restaurants in more than 130 countries and territories.
Shares of the company fell 25 cents to close at $71.49 before the report and were unchanged after-hours.
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