Yum Brands says key sales trends soften in China
LOUSIVILLE, Ky. (AP) — Yum Brands Inc.'s shares fell in after-hours trading Thursday after the fast-food operator disclosed softer sales trends in China and backed a disappointing full-year forecast.
The company, based in Louisville, Ky., operates KFC, Pizza Hut and Taco Bell worldwide.
Yum Brands has focused much of its attention on rapidly expanding markets such as China. Revenue from its stores in China open at least a year increased 21 percent last year. Same-store sales are an important measure of financial performance because it strips away the effect of recently opened or closed stores.
The company said it expects same-store sales overall to be up 4 percent in the fourth quarter. The company said stronger-than-expected performance by its restaurants in the U.S. and other international markets will offset softer sales in China for the period.
Yum Brands expects same-store sales to increase 6 percent in China for the full fiscal year. The company added 800 new sites in China during the year.
Yum Brands backed its full-year forecast of earning $3.24 per share on an adjusted basis, which represents year-over-year growth of 13 percent. Analysts polled by FactSet had forecast earnings of $3.28 per share. Yum also expects its earnings per share to increase 10 percent in 2013.
The company made the announcement ahead of its annual investor meeting, scheduled for Dec. 6.
Yum Brands shares dropped $4.52, or 6.1 percent, to $69.95 in after-hours trading. It was up 58 cents to close at $74.47 in the regular session.