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Yum Brands warns, brings activist Meister on board

Yum Brands on Thursday added activist investor Keith Meister to its board of directors and lowered its outlook for earnings and China sales this year.

While announcing it is nearing the end of a strategic review, the KFC and Pizza Hut operator said it would see flat to low single-digit profit growth this year. It previously forecast a low single-digit earnings increase.

The outlook reflects foreign exchange rates, which Yum expects will take 1 to 2 percent from full-year earnings. It also tempered expectations for its key China market, projecting same-store sales to fall from last year.

Yum Brands' KFC and Taco Bell
Adam Jeffery | CNBC
Yum Brands' KFC and Taco Bell

The restaurant chain said Meister, whose firm Corvex Management held more than 3 percent of Yum shares as of June 30, will be "invaluable" as it continues to restructure.

"This is a company with multiple avenues for unlocking significant long-term value, and I look forward to working with the board and management to expeditiously finalize a plan that we believe can deliver that value to shareholders," Meister said in a statement.

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Yum appoints Meister to its board as it looks for a growth catalyst, particularly in China. In its most recent reported quarter, the company's same-store sales in that country rose 2 percent, well below Wall Street's estimates.

It expects fourth-quarter same-store sales in China will be in a range of flat to rising 4 percent. It plans to report the metric monthly for the rest of the year, starting with October.

Yum's share were up 2.5 percent in extended trading Thursday.