Yum's 3Q results to shed light on China recovery

Yum's 3Q results to shed light on China recovery push

Associated Press

NEW YORK (AP) -- Yum Brands Inc. should provide a closer look at how its KFC, Pizza Hut and Taco Bell chains are performing at home and abroad when it reports its quarterly results after the market closes on Tuesday.

WHAT TO WATCH FOR: Investors have been keeping a close eye on Yum's China unit, which accounts for more than 40 percent of the company's operating profit. After years of success in the region, Yum is still struggling to get sales growing again after a TV report late last year showed some of its chicken suppliers were giving chickens unapproved levels of antibiotics.

A subsequent bird flu scare also derailed the company's early recovery efforts.

WHY IT MATTERS: Yum has more than 39,000 locations around the world but the success of its three chains has varied by country. In China, for example, Yum's growth has hinged on the popularity of KFC. The company has said it plans to invest more heavily in Pizza Hut locations.

Back at home, meanwhile, Taco Bell has outperformed Pizza Hut and KFC partly as a result of the chain's new menu items, such as the Doritos-flavored tacos. But Yum is trying to boost sales at the latter chains as well by shaking up menus. KFC, for example, recently introduced boneless versions of its chicken, as well as snack cups of chicken and fries intended for people on the go.

Still, traditional fast-food chains including rival McDonald's are struggling to grow in the U.S. as people's eating habits change. The focus on value in the tough economy is also pressuring profit margins.

LAST YEAR'S RESULTS: Yum earned 99 cents per share on revenue of $3.57 billion.

WHAT'S EXPECTED: Analysts expect the company to earn 93 cents per share on revenue of $3.54 billion

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