Did KFC Make Enough Chinese Consumers Say Yum?
Yum Brands (NYSE:YUM), the owner of KFC, Pizza Hut, and Taco Bell, will report its third-quarter earnings after the market close on Tuesday, and investors will learn whether the company has managed to reverse its six-month trend of sales declines.
Shareholders will be especially interested to see how Yum restaurants have fared in China, as the Louisville, Kentucky-based company depends on the Asian country for almost half of its profits, despite its greater outlet presence in the U.S. Yum Brands has seen greater success in China thanks to consumers’ interest in its restaurants over McDonald’s (NYSE:MCD); however, a hurting Chinese economy and a food-safety scare have caused Yum’s business in China to slow, leading to sales declines for the company and increased investor concern.
According to The Wall Street Journal, Yum Brands has worked to resurrect success and revive its sales figures in China, but same-store sales in August were still down 10 percent. Despite the company’s iffy financial situation, its stock is still up a little more than 8 percent this year, and it’ll be interesting to see how its latest earnings affect that score.