Yum! Brands Inc., the owner of the KFC, Pizza Hut and Taco Bell chains, gained 3.5 percent after same-store sales at its restaurants in China grew an estimated 5 percent last month.
Yum said sales at its established KFC restaurants in China were up 10 percent during October, with overall results in the Asian nation pulled down by a 9 percent drop in sales at Pizza Hut. The company also reiterated its forecast for the fourth quarter, saying it expects same-store sales to grow as much as 4 percent in China. The shares rose 3.5 percent to close at $69.47 in New York. The China results were released late Thursday.
Yum recently bowed to activist pressure and agreed to separate its China business from its U.S. operations. Yum’s China division, which includes almost 7,000 restaurants, accounts for more than half the company’s revenue. The operation has weighed on results since the Louisville, Kentucky-based company was rocked in 2014 by a scandal involving a supplier accused of selling expired meat.
“The pace of recovery in our China division is below our expectations,” Chief Executive Officer Greg Creed said last month in a statement on third-quarter earnings.
The October sales gain in China came after a 6 percent jump in September, according to the company. Yum shares have slumped 4.6 percent this year.