Yum brands reports mixed sales results

KFCYum Brands reported mixed quarterly results for its troubled China unit, which the company is spinning off, while showing improved sales figures in the US.

The Louisville, Kentucky, company said sales rose 6 per cent at established KFC restaurants in China, while its Pizza Hut sales fell 8 per cent. Jonathan Blum, Yum’s chief public affairs officer, attributed the drop at the pizza chain to the country’s economic slowdown.

“The marketplace has affected casual dining sales in general, which has had an impact on Pizza Hut,” Blum said. He added the company planned to sharpen its focus on value to boost results.

Yum has been trying to fix its business in China ever since sales there were slammed by food scares. Executives have also conceded they made marketing blunders. In October, Yum announced plans to spin off the business into a separate, publicly traded company, which, according to Håkon Helgesen, a retail analyst at Conlumino, is a “sensible step that will allow allow Yum and Yum China to focus on their respective priorities. However, without the boost to growth provided by China, the legacy business will need to work much harder to reestablish its relevance if it is to grow in a much more competitive market.”

Back at home, Yum said KFC and Pizza Hut both showed improved sales figures, with the two chains undergoing a turnaround push to reverse slumping sales. KFC’s sales were up 3 per cent at established locations, and Pizza Hut’s were up 2 per cent.

Yum’s strongest chain in the US, Taco Bell, delivered a 4 per cent sales increase at established locations.

For the quarter ended December 26, Yum Brands Inc reported net income of $US275 million ($A383.01 million), after reporting a loss in the same period a year earlier.

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