Yum profit beats as China sales fall less than forecast
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Yum Brands shares rallied on Tuesday after the restaurant operator topped earnings expectations as comparable sales in China declined less than forecast.
Yum, which operates KFC, Pizza Hut and Taco Bell restaurants, reported first-quarter earnings of 80 cents per share on revenue of USD2.62 billion.
Same-store sales in China, a key division for the company, fell 12 percent during the quarter after allegations that a former supplier used expired meat. The company’s China unit has been especially hard hit this year because of a supplier scare last summer. Analysts expect same-store sales in the country to shrink 14.4 percent.
Questions & Answers
Q.Why did same-store sales in China decline for Yum Brands?
Why did same-store sales in China decline for Yum Brands?
Same-store sales in China fell because of allegations that a former supplier had used expired meat. The company's China unit has faced difficulties due to a supplier scare last summer.
Q.How did the actual sales decline in China compare to analysts' expectations?
How did the actual sales decline in China compare to analysts' expectations?
The same-store sales in China declined by 12 percent. This was better than analysts' expectations, who had forecast a 14.4 percent shrinkage in sales for the country.
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