Yum! Brands lowers Q4 outlook on China worries
LOUISVILLE, Ky. — Yum! Brands, parent company of Kentucky Fried Chicken, Taco Bell and Pizza Hut, lowered its fourth quarter and fiscal 2012 earnings outlook due to a controversy over the quality of the company's chicken in China. The company's stock declined 4 percent after the market closed Jan. 7.
The company said it expects same-store sales in its China Division to decline 6 percent in the fourth quarter. Yum previously had same-store sales in China down 4 percent. The company attributed the decline to “adverse publicity” associated with a Chinese government probe of poultry suppliers.
“The company expects full-year 2012 earnings per share, excluding Special Items, of approximately $3.24,” the company said in a brief filing with the Securities and Exchange Commission. “We do not anticipate providing any further updates or commentary until our scheduled earnings release on Feb. 4, 2013.”
The Shanghai Food and Drug Administration launched an investigation into the levels of antibiotics in KFC chicken. The agency said excessive amounts of antibiotics were found in raw chicken from two KFC suppliers.