Positive Sales Trends for Yum in China

With as many problems as have been seen in China for Yum! Brands Inc. (NYSE: YUM), you might think that any good news there might be worth being highlighted more than in an SEC filing. Yum signaled in an SEC filing after the close on Thursday that its China division’s October same-store sales grew by roughly 5%.

This was said to be comparable to the China division’s same-store sales growth of 6% in September. The company noted that October’s results include estimated growth of 10% at its KFC and an estimated decline of 9% at Pizza Hut Casual Dining.

At this point, China’s problems were around the KFC unit in the recent past. This was one issue that helped to prompt the move towards a split of Yum for a domestic company and one in China.

Yum shares closed down 1.9% at $67.12 on Thursday. The after-hours session last had Yum shares up close to 4% at $69.80. That is against a 52-week range of $66.35 to $95.90 and a consensus analyst price target of $82.47.

Yum’s SEC filing from Thursday said:

We are reiterating our guidance for the fourth quarter of China Division same-store sales growth of 0% to 4%, with positive same-store sales growth at KFC and negative same-store sales at Pizza Hut Casual Dining. As previously stated, same-store sales remain difficult to forecast in China, and our overlaps become more difficult for the balance of year.

As a reminder, our fourth quarter for the China Division includes the months of September, October, November and December. We will release November same-store sales for the China Division in conjunction with our Annual Investor Conference.

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