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Yum China CEO: Last quarter's dismal sales a blip ahead of spinoff

Yum Brands released a third-quarter earnings report last week that was plagued by dismal sales in China, leaving investors worried about the spinoff of Yum China scheduled at the end of the month — however, Micky Pant, CEO of Yum China, says there's nothing to worry about.

When asked about the negative quarter, Pant told CNBC's "Power Lunch" that "it was just one quarter. In the last five quarters we had four positive quarters. If you take the general sweep of things over the last 25 years, Yum China has been one of the most successful companies in China."

Greg Creed, CEO of Yum Brands, blamed protests over an international court ruling about the South China Sea as the reason for the plunge in sales for the China division, the unit usually generating the most operating profit. However, Pant clarified that after conducting extensive research, they found "there was no impact on [the] brand at all."

Pant also said in the statement that because the company is a "highly cash-generative business, with no external debt and ample cash on hand," Yum will be able to invest in numerous new restaurants. The CEO is targeting 500 stores each and every year and recently announced the brand will have 7,500 by the end of this year, three times the amount of the next competitor.

One of those new restaurants he's introducing is Taco Bell in China, which is scheduled to open at the end of this year or beginning of next year, just in time for Lunar New Year.

"There is no reason why China, which has the second biggest economy and will definitely become the world's biggest economy in the years to come, shouldn't have more," Pant said. "There is absolutely no more dynamic economy than China right now."

And if observers are not sure the Chinese will line up for Taco Bell, Pant thinks "it is time to offer [the Chinese] the opportunity to 'live mas.'"

Yum China is on track to split from Yum Brands on Oct. 31. Yum China is expected to begin trading on Nov. 1 under the ticker symbol 'YUMC.'

Sarah Whitten contributed to this report.








Pedestrians walk past a sign depicting Colonel Harland Sanders, the founder of Kentucky Fried Chicken, outside a Yum! Brands Inc. KFC restaurant in Shanghai, China.
Qilai Shen | Bloomberg | Getty Images
Pedestrians walk past a sign depicting Colonel Harland Sanders, the founder of Kentucky Fried Chicken, outside a Yum! Brands Inc. KFC restaurant in Shanghai, China.