September 6, 2013 / 9:38 PM / in 4 years

UPDATE 1-Yum sees China sales rebound in 4th quarter

Sept 6 (Reuters) - 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.

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