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Yum Brands blames drop in Chinese sales on South China Sea crisis

Jessica Morris
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Parent Company of KFC, Taco Bell, And Pizza Hut Report Strong Earnings
Yum Brands owns KFC, Taco Bell and Pizza Hut (Source: Getty)

KFC parent company Yum Brands said today that its earnings and revenues missed analysts' expectations in the third quarter.

Its adjusted earnings per share of $1.09 on revenues of about $3.3bn. Both measures missed analysts' forecasts for $1.10 per share and $3.5bn respectively.

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It came as like-for-like sales at Yum China, the division which generates the most operating profit, fell one per cent during this period.

Greg Creed, chief executive of Yum, blamed the drop on protests over an international court ruling regarding the South China Sea dispute.

"If not for this event, we believe the China division would have delivered its fifth consecutive quarter of positive same-store sales growth," he said in a statement.

"The good news is the incident was short-lived and the sales impact continued to dissipate through August and September.

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Like-for-like sales at the company's Pizza Hut Division also slumped one per cent, but they rose at its KFC Division and Taco Bell Division by four per cent and three per cent respectively.

The company confirmed it's on track to hive off its Chinese business which will start trading on the New York Stock Exchange on 1 November under "YUMC".

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