Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Yum Brands    YUM

YUM BRANDS (YUM)
Mes dernières consult.
Most popular
  Report  
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

Yum! Brands, Inc. : Yum stumbles badly in China, warns on profit

share with twitter share with LinkedIn share with facebook
share via e-mail
0
02/05/2013 | 02:11am CET
File picture shows customers waiting for their orders at a KFC outlet in Beijing

(Reuters) - KFC parent Yum Brands Inc warned on Monday that it expects 2013 earnings to shrink rather than grow as it struggles to manage a food safety scare in China, and sees no return to growth in restaurant sales there until the fourth quarter.

Yum shares fell 5.6 percent in after-hours trading, as Wall Street analysts and investors digested the disappointing news from the company that is widely seen as a model for how to do business in the complex Chinese market.

"This is going to take all the experts they have in public relations to stem the tide. I don't think anyone saw this coming," Edward Jones analyst Jack Russo said.

Yum reported a 6 percent drop in fourth-quarter sales at established restaurants in China due to "adverse publicity" regarding chemical residue found in some of its chicken supply.

Its China business continued to suffer in January, when same-store sales dropped 37 percent, including a 41 percent fall for KFC and a 15 percent decline for Pizza Hut Casual Dining.

Yum expects China's same-store sales to be down 25 percent for the first quarter, which includes only the months of January and February. It said KFC same-store sales in China should turn up by the fourth quarter.

As a result, Yum forecast a "mid-single digit" percentage decline in earnings per share for 2013. Yum previously forecast 2013 earnings per share growth of at least 10 percent, and analysts polled by Thomson Reuters I/B/E/S on average had expected the same.

Yum has nearly 5,300 restaurants in China, mostly KFC, and the region accounts for more half its sales and 40 percent of total operating profit. Its strong reputation for high food quality helped it grow briskly in a country that has been rocked by serious and persistent food safety scandals.

Yum's China sales first took a hit in mid-December when government food safety agencies began probing the company's supply chain. The investigations were prompted by a report on China Central Television, which found that two of Yum's suppliers purchased chicken from farmers who used excessive levels of antibiotics in their animals.

Yum stopped sourcing from one of those suppliers and cut purchases from a problematic plant used by the other.

While the company was not fined by food safety authorities, it has suffered a huge backlash in the mainstream media and on Weibo, China's equivalent to the popular U.S. social media site Twitter.

In early January, Yum apologized to customers in China over its handling of the food scare.

On Monday, it said it would begin an aggressive marketing campaign after the Chinese New Year on February 10 to restore KFC's brand image.

The company would do well to shake off all corporate "hubris" and fall on its sword, said branding expert Robert Passikoff, president of Brand Keys.

"If your same store sales are down by more than one-third, something's not working," Passikoff said.

Fourth-quarter net income at Yum fell to $337 million, or 72 cents per share, from $356 million, or 75 cents per share, a year earlier.

Excluding special items, Yum had a profit of 83 cents per share. That topped analysts' average estimate by a penny, according to Thomson Reuters I/B/E/S.

Total revenue rose to $4.15 billion from $4.11 billion.

Through Monday's close at $63.94, Yum shares were down 14 percent from late November, when they hit an all-time high, but then sank on the initial China sales warning.

Following Monday's warning, after the regular market close, shares of Yum slid 5.6 percent in late trade to $60.33.

(Reporting By Lisa Baertlein in Los Angeles; Additional reporting by Kazunori Takada in Shanghai; Editing by Leslie Gevirtz and Tim Dobbyn)

By Lisa Baertlein

Valeurs citées dans l'article
ChangeLast1st jan.
YUM BRANDS -0.35% 77.81 Delayed Quote.-4.57%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on YUM BRANDS
02/20YUM BRANDS : American brand invades Zim
AQ
02/15YUM BRANDS : ! in the news; brian niccol to depart taco bell; julie felss masino..
AQ
02/14CHIPOTLE MEXICAN GRILL : shares jump as new chief sparks hope of quicker turnaro..
RE
02/14YUM! BRANDS, INC. (NYSE : YUM) Files An 8-K Departure of Directors or Certain Of..
AQ
02/14Chipotle Recruits CEO From Taco Bell -- WSJ
DJ
02/14CHIPOTLE MEXICAN GRILL : taps former Taco Bell executive Brian Niccol as CEO
AQ
02/14Chipotle turns to Taco Bell's 'Doritos Locos' chief as new CEO
RE
02/14Chipotle turns to Taco Bell's 'Doritos Locos' chief as new CEO
RE
02/13Philippines' Jollibee raises stake in U.S. based Smashburger Master
RE
02/13YUM BRANDS : ex-dividend day
FA
More news
News from SeekingAlpha
02/21Taco Bell passes Burger King in U.S. 
02/20CHIPOTLE : New CEO, Now What? 
02/20Domino's Pizza Stock Looks Tasty In The Near To Medium Term 
02/20WALL STREET BREAKFAST : Albertsons Scoops Up Rest Of Rite Aid 
02/20UK chicken shortage for KFC 
Financials ($)
Sales 2018 4 484 M
EBIT 2018 1 783 M
Net income 2018 1 098 M
Debt 2018 8 733 M
Yield 2018 1,76%
P/E ratio 2018 23,82
P/E ratio 2019 20,44
EV / Sales 2018 7,83x
EV / Sales 2019 8,14x
Capitalization 26 370 M
Chart YUM BRANDS
Duration : Period :
Yum Brands Technical Analysis Chart | YUM | US9884981013 | 4-Traders
Technical analysis trends YUM BRANDS
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 85,7 $
Spread / Average Target 9,5%
EPS Revisions
Managers
NameTitle
Greg Creed Chief Executive Officer & Director
David W. Gibbs President & Chief Financial Officer
Robert D. Walter Non-Executive Chairman
Tom C. Nelson Independent Director
Mirian M. Graddick-Weir Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
YUM BRANDS-4.57%26 370
MCDONALD'S CORPORATION-7.05%125 788
YUM CHINA HOLDINGS INC0.00%15 540
DOMINO'S PIZZA, INC.11.02%9 687
CHIPOTLE MEXICAN GRILL0.30%8 629
WENDYS CO-4.38%3 970