Company says negative trends in China will continue into 4Q
Yum! Brands Inc. downgraded its outlook for the year on Tuesday, saying negative trends in China will continue into the fourth quarter. For its Sept. 7-ended third quarter, the company recorded a 68-percent decline in net income. Same-store sales fell 11 percent in China, where the company’s KFC brand has not yet recovered after concerns were raised about poultry quality in the region earlier this year. In the U.S., same-store sales were flat for the third quarter. For the year, the company now expects a high-single to low-double-digit decline in earnings per share, excluding special items, compared to earlier projections of a mid-single-digit decline. Louisville, Ky.-based Yum Brands operates or franchises 37,446 restaurants under the KFC, Taco Bell, Pizza Hut and other brand names worldwide, including 16,042 in the U.S.
Result: $152 million, or 33 cents per share (excluding charges related to the Little Sheep brand in China)
% Decrease: 68% (from $471 million, or $1 per share)
Result: $3.5 billion
% Decrease: 3% (from $3.6 billion)
% Decrease at KFC: 4%
% Increase at Taco Bell: 2%
% Decrease at Pizza Hut: 1%
• Yum 2Q profit falls 15%
• Yum: China sales setbacks to intensify in 2013
•Same-store sales at NRN.com
This article has been revised to reflect the following correction:
Correction: October 9, 2013 This story has been updated to state that Taco Bell's same-store sales increased by 2%.
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