Yum's China sales fall short on weakness at Pizza Hut

Monday, 13 Jan 2014 | 7:47 PM ET
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KFC owner Yum Brands on Monday said December sales at established restaurants in China, its top market, rose a weaker-than-expected 2 percent as results at its Pizza Hut Casual Dining chain fell far short of Wall Street estimates.

China accounts for more than half of Yum's operating profit. The company's shares have risen more than 8 percent since the start of November on the expectation that sales would compare favorably with dismal results from a year earlier.

(Read more: Fast food CEO: How govt regulation is driving us abroad)

Yum's China same-restaurant sales for December included a 5 percent increase at KFC and a 3 percent decline at Pizza Hut Casual Dining. Yum is the biggest Western restaurant operator in China, with almost 4,500 KFC outlets there at the end of its third quarter.

Taco Bell is our shining: Yum Brands CEO
After Yum Brand's disappointing quarter, David Novack, chairman and CEO of Yum Brands, tells Mad Money host Jim Cramer Yum has made a steady progress in China this year and is rebuilding the trust of the KFC brand in that region.

Analysts polled by Consensus Metrix expected same-restaurant sales to rise 6 percent at KFC and 5.7 percent at Pizza Hut.

Yum's China sales plummeted in December 2012 after China Central Television reported that a few poultry farmers doing business with Yum suppliers fed their chickens excessive amounts of antibiotics. That was followed by a bird flu outbreak in the spring.

Louisville, Kentucky-based Yum has since culled underperforming suppliers and begun an aggressive marketing campaign.

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