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The slower-than-expected recovery of sales in China has led to the lowering of the 2014 profit forecast of Yum Brands. This is the second time for the company to change its estimates after the food safety scare which happened back in July.
Operating both KFC and Pizza Hut fastfood chains, the shares of the company went down by 6.5% in extended trading.
In a statement, Yum Brands said that its full-year profit growth will likely be a mid-single-digit percentage.
Earlier, it cut its forecast to 6-10 percent from what used to be not less than 20% in profits.
In a television report that was aired back in July, it showed the wrong way of handling meat by supplier Shanghai Husi Food that scared the company’s China customers away. This was one of the major blows for Yum because China is one of its biggest markets by sales.
Other than Pizza Hut and KFC, there are also other restaurant chains that landed into the same controversy like McDonald’s, Burger King and Starbucks as they imported meat from the said supplier too.
Last Tuesday, Yum Brands stated that it expects its 2015 profit to grow by at least 10%. As for the operating profit in the China market, the company expects it to grow by at least 15%.
