Yum Brands says decline in China slowed in 2nd quarter and KFC and Taco Bell revenue rose

LOUISVILLE, Ky. – Yum Brands said Tuesday that revenue at its KFC and Taco Bell chains improved in the second quarter and said its sales struggles in China got a little easier.

The Louisville, Kentucky-based company said sales were boosted by new menu items, like breakfast food and premium coffee at Taco Bell and $5 Fill Up combo meals and chicken and rice bowls at KFC. Growth for the Pizza Hut chain continued to lag the other restaurants. Revenue in China, a critical market for Yum Brands, fell 4 per cent compared to a year ago, but that was an improvement from the last few quarters.

The company’s Chinese division is still recovering from bad publicity connected to poor food handling by a former supplier. Sales in China division restaurants open at least a year, a key metric of a retailer’s health, slid 10 per cent during the quarter. That metric has declined by at least 10 per cent for four straight quarters.

Yum Brands Inc. said its net income fell 30 per cent to $235 million, or 53 cents per share, over the three months that ended on June 13. Excluding one-time items, the company earned 69 cents per share. Its revenue sank 3 per cent to $3.11 billion.

Analysts expected income of 63 cents per share and $3.18 billion in revenue, according to Zacks Investment Research.

Yum said its per-share profit surpassed its expectations in the second quarter, and it backed its forecast for full-year growth of at least 10 per cent. Yum Brands expects a strong second half of the year in China.

Shares of Yum Brands lost 49 cents to $91.50 in after-hours trading. The stock has climbed 26 per cent in 2015, compared with a 2 per cent gain in the Standard & Poor’s 500 index over the same time.

Yum Brands has about 41,000 restaurants around the world.


This story has been corrected to show that Yum Brands’ overall sales in China didn’t decline by double-digit percentages the last few quarters.


Elements of this story were generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on YUM at


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