April 24 KFC parent Yum Brands Inc
expects sales at its KFC restaurants in China to recover by the
end of the year and fears surrounding a bird flu outbreak to be
short-lived, company executives told analysts during a
Based on prior health crises, including a bird flu outbreak
in 2005, the company expects sales to improve over six to nine
months, and has instituted "Operation Thunder" to restore buyer
confidence in its KFC brand, said Chief Executive David Novak.
"Operation Thunder to the Chinese people means strong
decisive action," said Novak, who said the company has
eliminated 1,000 smaller, less sophisticated chicken suppliers
and started 30-second TV commercials to promote quality
"Cooked chicken in perfectly safe," Novak stressed.
Sales at established restaurants in China fell an expected
20 percent in the first quarter, and Yum warned that fears
surrounding the bird flu outbreak there were continuing to hurt
sales already struggling to recover from a previous food safety
Yum on Tuesday reported quarterly profit fell less than Wall
Street expected, despite the results from China.
The fast-food operator reaps more than one-half of overall
sales from China, where most of its nearly 5,300 restaurants are
Yum intends to continue expanding in China, and is on track
to add 700 new restaurants this year, company executives said.
"We know we're doing the right things," said Novak. "We have
a great brand and we intend to stay the course. We have growth
staring us in the face."
Shares rose 7.2 percent to $68.75 in late-morning trade.
Yum also operates the Pizza Hut and Taco bell chains and has
more than 39,000 restaurants in more than 130 countries.