Tags: Yum | Brands | Profit | Forecast

Yum Brands Cuts Profit Forecast Again on Slow China Recovery

Tuesday, 09 Dec 2014 05:40 PM

Yum Brands Inc. lowered its profit forecast for the year for the second time, hurt by slower-than-expected sales recovery in China following a food safety scare in July.

Shares of the company, which operates Pizza Hut and KFC restaurant chains, fell in extended trading after the news Tuesday.

The company said it expects full-year profit growth to be in "mid-single-digit" percentage.

It had earlier cut the forecast to 6-10 percent from at least 20 percent.

A television report in early July showing improper meat handling by supplier Shanghai Husi Food scared away customers in China, Yum's biggest market by sales.

U.S.-based fast-food chains McDonald's Corp and Burger King Worldwide Inc and coffee chain Starbucks Corp also landed into controversy as they procured meat from Shanghai Husi.

Food safety is a highly emotive issue in China where there have been numerous scandals from photos of food oil being scooped from drains to tales of phoney eggs and melamine-tainted milk powder.

Yum said on Tuesday it expects 2015 profit to grow by at least 10 percent, while expecting operating profit in the China division to grow by at least 15 percent.

At about 5:30 p.m. in New York, the company's shares were down 5 percent at $71.50, after falling 1.6 percent to close the regular session at $75.22 on the New York Stock Exchange. 

© 2017 Thomson/Reuters. All rights reserved.

 
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Yum Brands Inc. lowered its profit forecast for the year for the second time, hurt by slower-than-expected sales recovery in China following a food safety scare in July.
Yum, Brands, Profit, Forecast
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2014-40-09
Tuesday, 09 Dec 2014 05:40 PM
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