Yum! Brands lowers profit forecast

Yum! Brands lowers profit forecast

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).

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