×

US companies dash hopes for a China recovery

Wynn Macau casino resort in Macau, China.
Jerome Favre | Bloomberg | Getty Images
Wynn Macau casino resort in Macau, China.

After falling more than 40 percent from June to August, China's Shanghai composite is up 16 percent from its lows on speculation the government will support companies and the economy may recover.

However U.S. companies on the ground in China dashed those hopes this week by describing rapidly deteriorating business conditions.

Yum! Brands

Yum Brands this week warned about falling China demand for the second time this month.

The company Thursday lowered its fourth-quarter China division guidance from mid-single-digit sales growth to zero to 4 percent.

Nine days earlier, Yum reported same-store sales for its China division increased just 2 percent in the third quarter, way lower than the Street's consensus estimate of 9.6 percent growth.

"The (Yum Brands) updated outlook suggests comps (comparable sales) continue to remain volatile and have likely weakened in the first two weeks of October," Peter Saleh of BTIG wrote in a note to clients Friday.

Yum wasn't alone...

Contact Investing

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    Get these newsletters delivered to your inbox, and more info about about our products and service. Privacy Policy.