WASHINGTON (dpa-AFX) - Restaurant chain Yum! Brands Inc. (YUM), Thursday reaffirmed its guidance for the fiscal year 2012, but said same-store sales in its key market of China will slacken in the fourth quarter. The news dragged Yum! Brands stock down ten percent in after-hours trade.
Meanwhile, the company has forecast adjusted earnings to grow at least ten percent in 2013.
The parent company of the Taco Bell and KFC chains continues to expect full-year 2012 adjusted earnings of $3.24 per share. Analysts polled by Thomson Reuters currently estimate earnings of $3.28 per share for the year. Analysts' estimates typically exclude special items.
Yum! Brands said results in 2012 are being led by double-digit growth in operating profit, prior to foreign currency translation, in major markets of China, Yum! Restaurants International, and the U.S.
However, for the current fourth quarter, Yum! Brands anticipates softer sales in China, where same-store sales are expected to be a negative 4 percent, while the International and the U.S. regions are expected to grow 4 percent and 3 percent, respectively.
China accounts for more than half of Yum! Brands overall business and concerns linger over cooling economic conditions there, coupled with intense rivalry. In its third quarter, Yum! Brands had somewhat allayed those fears with strong growth, even as the U.S. and International regions struggled.
For fiscal 2013, Yum! Brands estimate adjusted earnings of least 10 percent, while analysts currently estimate earnings of $3.74 per share.
In that period, the company expects operating profit in China to grow 15 percent, International region to improve 10 percent, and the U.S. by 5 percent.
Yum! Brands plans to open at least 1,800 new international units in 2013, with 700 in China and 150 in India. It also intends to refranchise 200 units in the U.S. and expects $200 million in proceeds mostly related to Taco Bell units.
The company's stock closed Thursday at $74.47, up 0.78%, on a volume of 2.4 million shares. In after hours, the stock dropped $5.24 or 7.04%.
Copyright RTT News/dpa-AFX
