Yum’s December China Sales Trail Estimates

Yum! Brands Inc. (YUM), owner of the KFC and Pizza Hut brands, said same-store sales rose 2 percent in China last month, trailing analysts’ estimates, as its fried-chicken and pizza chains face more local rivals.

Analysts estimated a 6 percent increase, the average of 10 projections from Consensus Metrix. Sales at KFC stores open at least 12 months in China rose 5 percent in December, the Louisville, Kentucky-based company said yesterday in a filing. Same-store sales at Pizza Hut fell 3 percent.

The company, which has about 4,460 KFC and 1,100 Pizza Hut locations in China, is enduring more competition from local dining chains such as Dicos and Hua Lai Shi. KFC also is trying to bring back Chinese diners following an outbreak of avian flu and the investigation of a former supplier for selling food with too much antibiotics. In November, Yum posted a surprise 1 percent gain in same-store sales in China after a half-priced chicken deal boosted sales at KFC.

Yum fell 0.2 percent to $73.23 at the close in New York. The shares gained 14 percent last year while the Standard & Poor’s 500 Restaurants Index increased 23 percent.

In China, Pizza Hut has been expanding its menu and revamping its beverages to attract new diners. Along with pizza, the chain sells steak and pasta as well as breakfast fare.

The fast-food company in December reiterated its forecast for a 20 percent profit increase, excluding certain items, in 2014. Yum, which gets about half of its revenue from China, plans to open about 700 new stores there this year.

Comparable-store sales are considered an indicator of growth because they include only older, established locations. Yum, which also owns Taco Bell, has more than 39,500 restaurants worldwide.

Yum is scheduled to report fourth-quarter earnings on Feb. 3.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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