Yum Brands Q3 Profit Report Fails to Ease China Fears
KFC’s parent company Yum Brands Inc. said on Wednesday that its net profit has hit $383 million in the third quarter that ended September 3, matching Wall Street’s expectations of 80 cents per share for the period.
Yum Brands Inc. on Wednesday said posted a higher net profit in its fiscal third quarter for the year, but failed to assure investors over worries about slowing growth in China, its biggest market to date.
In a report, KFC’s parent company said its net income for the third quarter that ended September 3 increased to $383 million or 80 cents per share from $357 or 74 cents per share a year ago – matching Wall Street’s expectation for the period.
Meanwhile, the company’s revenue also rose to $3.27 billion in the fiscal third quarter from $2.86 billion a year ago.
But despite the positive output, shares of the fast-food giant fell 1.9 percent in extended trading as the company struggles to give assurance on the failing sales in China. Yum shares fell to $48.51 after closing at $49.44 on the New York Stock Exchange.
China, now the fastest growing economy in the world, is the biggest earnings driver for Yum Brands, accounting to more than 40 percent of its overall profits.
Analysts earlier forecasted that slowdown in China may accelerate during the period, as well as in other Asian countries.
On Tuesday, Yum Brands said it would raise its menu prices to help offset higher costs.
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