Yum! Brands, which owns fast food chains like Pizza Hut, Kentucky Fried Chicken and Taco Bell, has lowered its profit forecast after a huge food scandal in China.
Profit forecast halved
The American company had expected a 20 % profit per share, but has now lowered that forecast quite drastically, to 6 - 10 %. The like-for-like turnover in China has dropped 14 % in the third quarter. Cause was a supplier-based food scandal. A 13 % like-for-like turnover drop (from its 6,400 Chinese stores) is now to be expected for the full year.
It may take a while before Yum! Brands recovers from this blow, but CEO David Novak has full faith in the future: "I'm convinced that Yum! Brands can achieve strong and stable growth in the next few years, despite this incident at our Chinese supplier", he told CNBC.
Yum! Brands has managed a 404 million dollar (320 million euro) third quarter net profit, compared to 152 million dollar (120 million euro) the year before. Its turnover also grew 3 % to 3.3 billion dollar (2.6 billion euro).