Yum's China Sales Fall Sharply Amid Bird-Flu Scare

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KFC parent Yum Brands on Wednesday reported a sharper-than-expected 13-percent drop in March sales at established restaurants in China after news about the country's new bird-flu out break took a big toll on sales.

The fast-food operator reaps more than half its overall sales in China, where most of its nearly 5,300 restaurants are KFCs. Yum was already struggling there because of a food-safety scare last year.

The average of four analyst estimates compiled by Consensus Metrix had called for Yum's China same-restaurant sales to drop 10 percent.

Yum Feels Sting of Bird Flu Fears
Yum Feels Sting of Bird Flu Fears

Shares in Yum fell 2.6 percent to $65 in after-hours trading following the report.Yum's stock had traded around $72 in late March before reports of the first deaths from the novel strain of avian flu. Click here for the latest after-hours quote.

Yum does not normally report monthly China sales results, but it is doing so while it works to turn that business around.

Same-restaurant sales in China rose an unexpected 2 percent in February,on flat KFC same-restaurant sales, which had created some hope among analysts and investors that the turnaround was taking hold.

March sales fell 16 percent at KFC on the bird-flu fears.