The outbreak of avian influenza in China is hurting KFC sales there, parent company Yum! Brands stated. The company is already suffering from an image problem in China, from an earlier controversy over its chicken suppliers.

The Kentucky-based company said in a regulatory filing on April 17 that the new avian influenza cases have had a "significant, negative impact" on KFC. The news comes at an already sensitive time for the company, which has been working to rebuild trust with customers following a television report that its suppliers were giving chickens unapproved levels of antibiotics.

That report already hurt sales for Yum!, which has about 5,300 locations in China. For March, Yum! said sales at restaurants in China open at least a year fell 13 percent, including a 16 percent drop at KFC. The decline follows a 20 percent drop for January and February.

The impact from the bird flu cases would be reflected in April's sales results, which will be reported May 10. Yum! Brands also operates Taco Bell and Pizza Hut.