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Information on global poultry, pig and animal feed markets.
Poultry Processing & Slaughter / Broilers & Layers
on January 8, 2013

Yum! Brands expects Chinese investigation to hurt profits

Publicity could have negative impact

Yum! Brands Inc. said it expects KFC's sales in China to suffer because of a recent government investigation of its poultry.

The company announced in late December that the Chinese government was conducting a review of two poultry suppliers who provided chicken with unapproved levels of antibiotics to KFC. While the supplies represent a small percentage of the company's product, the publicity did slow sales.

Yum! Brands said that due to the bad publicity associated with the review, it expects a key sales measure for KFC in China will come in lower than expected. It expects revenue from its stores in China open at least a year will be down 6 percent for the fourth quarter of its 2012 fiscal year, as opposed to its prior forecast of a 4 percent decline.

Yum! expects to earn $3.24 for the full fiscal year on an adjusted basis. The company declined to comment further until it releases its full quarterly results on February 4.

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