KFC parent Yum slammed by chicken scare in China

Published on NewsOK Modified: February 4, 2013 at 8:47 pm •  Published: February 4, 2013
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Although the investigation into chicken suppliers didn't focus solely on KFC, Blum said that the chain was hit especially hard because it's the biggest chicken chain in the country. He noted that the negative media attention had been slowing, but that the earnings results could stir up more bad publicity.

For the fourth quarter, a key sales figure fell 6 percent in China, in line with the decline the company had forecast last month. It marked the first decline in the region since 2009. A year ago, the figure had increased 19 percent.

For the period ended Dec. 29, Yum said net income fell to $337 million, or 72 cents per share. That's compared with $356 million, or 75 cents per share, a year ago. Not including one-time items, it earned 83 cents per share.

Revenue rose 1 percent to $4.15 billion.

Analysts expected a profit of 82 cents per share on revenue of $4.13 billion, according to FactSet.

The U.S. was a bright spot for the company, with sales at restaurants open at least a year up 3 percent in the quarter, driven by a 5 percent increase at Taco Bell and a 4 percent increase at KFC. At Pizza Hut, the figure fell 1 percent.

For all of 2012, sales at restaurants open at least a year rose 4 percent in China and 5 percent in the U.S. Yum said it opened 1,976 restaurants for the year, including 889 new units in China.

Its shares slid 5 percent to $60.36 in after-hours trading.

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