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Yum profit tops estimates as China sales fall less than forecast
[CHICAGO] Yum! Brands, owner of the KFC and Taco Bell fast-food chains, posted first-quarter profit that topped analysts' estimates as its China business showed signs of improving.
Excluding some items, profit was 80 US cents a share, the Louisville, Kentucky-based company said in a statement Tuesday. The average of analysts' estimates compiled by Bloomberg was 72 US cents a share. Same-store sales fell 12 per cent in China, better than the 14.4 per cent decline predicted by analysts. They had tumbled 16 per cent in the fourth quarter.
Yum has been trying to pull itself out of a two-year slump in China after a food-safety scare, bird flu outbreak and competition from local restaurants hurt sales. Last year, vendor OSI Group LLC was probed for altering expiration dates on meat, prompting Yum to end its relationship with the supplier. The company has been trying to bring back China's KFC customers with new foods and by adding coffee to its menu.
The shares rose in extended trading after the results were released. They have climbed 11 per cent this year through the close of trading on Tuesday, compared with a 7.9 per cent gain for the Standard & Poor's 500 Restaurants Index.