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Yum! Brands profit down 27% in Q1 2013

RBR Staff Writer Published 24 April 2013

Yum! Brands, a US-based operator of Taco Bell, KFC, Pizza Hut restaurants, has reported drop in Q1 2013 net income by 27% to $337m, compared to $458m in the same quarter last year.

Revenues for the first quarter of fiscal 2013 decreased by 8% to $2.54bn, as the company's China Division sales and profits were extensively impacted by unfavorable publicity from the poultry supply situation that occurred in late December 2012.

However, Yum!'s worldwide system sales were up 1%. Same-store sales declined 20% in China. Same-store sales grew 1% at YRI and 2% in the U.S.

Worldwide operating profit declined 14%, including a 41% decline in China.

Yum! Brands chairman and CEO David Novak said as anticipated, China Division operating profit fell 41% due to high media attention surrounding poultry supply in the country.

"Operating profit increased 19% at Yum! Restaurants International and 5% in our U.S. business," Novak added.

"There is no doubt 2013 will be a challenging year for our company. With news of Avian flu, there will obviously be more volatility with our China sales recovery.

I'm confident we will end the year with momentum and restore our track record of consistently delivering double-digit EPS growth in 2014 and beyond," Novak concluded.

Yum! Brands operates over 39,000 outlets in more than 130 countries and territories.