Yum Brands reported disappointing full-year guidance and quarterly results on Tuesday, sending shares lower in after-hours trading.
The company said it expects full 2014 earnings growth of between 6 percent and 10 percent, versus Wall Street expectations of 14 percent.
Yum posted third-quarter earnings of 87 cents per share on $3.35 billion in revenue, missing analysts expectations of 88 cents a share on $3.46 billion in revenue, according to a consensus estimate from Thomson Reuters.
"I'm absolutely confident in Yum! Brands' ability to deliver strong, sustainable growth in the years ahead despite the recent supplier incident in China, which has significantly impacted China sales, leading us to reduce our full-year EPS outlook," CEO David Novak said, adding that the sales were on the path to recovery.
Shares whipsawed after the announcement and were most recently nearly flat.
The company said same-store sales in China fell 14 percent in the third quarter due to a food safety scare. China sales are forecast to drop 13 percent, according to a consensus estimate from Consensus Metrix.
In a SEC filing in late July, Yum stated that a report about improper food handling practices by one of its suppliers in China hurt its sales in the country. While the company immediately terminated the relationship, the resulting media coverage sparked a negative impact at both KFC and Pizza Hut.
Reuters contributed to this report.
