Sept 6 KFC parent Yum Brands Inc said it
expects sales growth to resume at its established restaurants in
China this quarter, after a surprisingly steep August decline
following a food safety scare and a bird flu outbreak in its
most important market.
Yum on Friday estimated a 10 percent drop in China
same-restaurant sales for August, versus the 7.7 percent decline
expected by analysts polled by Consensus Metrix.
Yum said it expects China sales growth to resume in the
fiscal fourth quarter, which started this month, putting
pressure on the company to bolster sales.
Yum, which also owns the Taco Bell and Pizza Hut chains,
generates more than half of its overall operating profit in
China. It is the biggest Western restaurant operator there with
roughly 6,000 mostly KFC restaurants.
Its China restaurant sales took a dive late last year
following a media scare over chemical residues in chicken. That
was followed by a bird flu outbreak that destroyed diners'
appetite for poultry.
The company, which also faces stronger competition from
local eateries, said the August same-restaurant sales results
included an estimated 12 percent decline at KFC and 5 percent
rise at Pizza Hut Casual Dining.
Shares of Yum rose 0.6 percent to $70 in extended trading
following the news.