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Falling KFC China Sales Dent Yum! Brands Q3 Results

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Yum! Brands Inc. (NYSE: YUM), the parent company of KFC, Pizza Hut and Taco Bell, said after the market close on Tuesday that fiscal third quarter earnings fell sharply as sales at its KFC China unit continued to slide. Shares tumbled about 7% in aftermarket hours as both earnings and revenue fell short of Wall Street’s estimates.

The Company also slashed its full-year revenue guidance, citing weakness in KFC China. The Company anticipates same-store-sales to decline in the current quarter.

For Yum! Brands, China accounts for nearly half of total sales; however, its revenue has been declining since last three quarters due to a negative publicity, caused by food-safety scare and later by avian flu epidemic.

In the fiscal third quarter, same-store-sales plunged 11% in China. While same-store-sales at KFC fell 14%, it slipped 5% at Pizza Hut.

For the latest period, the Louisville, Kentucky based company posted a net income of $152 million or 33 cents a share compared to a profit of $471 million or a penny a share.

Stripping out onetime items, the adjusted earnings stood at 85 cents a share down from 99 cents a share, in the same quarter of last year.

Analysts polled by Thomson Reuters had expected earnings of 93 cents a share.

Revenue fell 3% during the quarter to $3.47 billion from $3.57 billion, in the same period of last year. Analysts’ consensus estimate was for revenue of $3.53 billion.








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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