Poor third-quarter sales in China caused shares of Yum Brands to fall 3 percent in after-hours trading on Wednesday.
Yum China, which reaps more operating profit for Yum than any other division, saw same-store sales fall 1 percent in the quarter, with KFC down 1 percent and Pizza Hut down 4 percent. Analysts had expected China's same-store sales to rise 4.5 percent.
Greg Creed, CEO of Yum, blamed protests over an international court ruling regarding the South China Sea as the chief reason that sales in China suffered.
"If not for this event, we believe the China Division would have delivered its fifth consecutive quarter of positive same-store sales growth," he said in a statement Wednesday. "The good news is the incident was short-lived and the sales impact continued to dissipate through August and September. Despite the protests, Pizza Hut Casual Dining continued its trend of quarterly sequential improvement."
The company is still on track to spin off its China unit in late October, however. Yum China is expected to begin trading on Nov. 1.