NEW YORK (AFP) – US fast-food giant Yum Brands reported Wednesday a swing into a fourth-quarter loss, saying its recovery in China from a tainted meat scandal was taking longer than it expected.
The parent of KFC, Pizza Hut and Taco Bell restaurant chains said it had a net loss of $36 million in the October-December quarter compared with a net income of $321 million a year ago.
Adjusted earnings per share, a gauge closely watched by Wall Street, fell 29 per cent to 61 cents.
The Louisville, Kentucky-based company said its earnings were affected by the July tainted meat scandal involving a former supplier, after a strong first half of the year.
“While the sales recovery in China continues to be slower than expected, we anticipate a strong second half of 2015 as the turnaround gains momentum, led by menu innovation across the year,” said Greg Creed, Yum’s chief executive, in a statement.
“Our top priority is to recover sales in China and capture the significant profit leverage we have in this business,” Creed said.
Creed said the company, which has more than 4,600 KFC restaurants and 1,100 Pizza Hut restaurants in China, plans to open least 700 new units in China.
Yum maintained its 2015 full-year forecast of at least 10 per cent growth in earnings per share.
Worldwide sales in the fourth quarter grew three per cent, weighed down by an 11 per cent fall in the China division.
Fourth-quarter revenues gained four per cent at nearly $4 billion.
For all of 2014, Yum reported a 3.7 per cent fall in net income to $1.05 billion. Adjusted earnings of $3.09 per share were up four per cent. Revenues rose one per cent to $13.28 billion.
Outside of China, the company said there was momentum in its KFC chicken chain and Mexican-style Taco Bell restaurants.