Yum warns on 2013 earnings as chicken scare hurts KFC
Published on Feb 5, 2013 6:58 AM
(REUTERS) - KFC parent, Yum Brands Inc, on Monday warned that it expects 2013 earnings to shrink rather than grow, as it grapples with a food safety scare that ensnared some of its chicken suppliers in its top market, and shares fell more than 6 per cent.
The company, which gets more than half of its overall sales and operating profit from China, reported a 6 per cent drop in fourth-quarter sales at established restaurants in China due to "adverse publicity" regarding its poultry supply.
Its business there continued to suffer in January, when China same-store sales dropped 37 per cent, including a 41 per cent fall for KFC and a 15 per cent decline for Pizza Hut Casual Dining.
As a result, Yum forecast a "mid-single digit" percentage decline in earnings per share for 2013. Yum previously forecast 2013 earnings per share growth of at least 10 per cent.
To continue reading, log in if you are a subscriber
Enjoy 2 weeks of unlimited digital access to The Straits Times. Get your free access now!