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Yum! Brands Revises 4Q China Sales Estimate

By Eric Volkman – Jan 7, 2013 at 7:57PM

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The company forecasts a deeper-than-previously-expected decline in sales in the country due to fallout from a controversy over food supplies.

Yum! Brands (YUM 2.11%) has updated its estimate for a decline of sales in China in the company's 4Q 2012, it said in an SEC filing. The operator of popular fast-food restaurants such as KFC and Pizza Hut now believes it will suffer a 6% decline in same-store sales in that nation during the quarter. It had previously anticipated a 4% drop in that figure.

In the filing, the firm attributed this to "adverse publicity associated with a government review of China poultry supply."  This refers to the controversy that arose last month following allegations that the company's suppliers injected growth hormones and antiviral agents into its goods in ways that breached food safety regulations.

For full-year 2012, Yum! Brands expects to post earnings of around $3.24 per share. Its stock was down by more than 5% in after-hours trading the day the filing was made.

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