Fast Food Shares Down On China Chicken Supplier Scare

Fast food companies with exposure in China trended down Thursday after Yum Brands, Inc. YUM said a chicken supplier in its China market is under investigation for improper food-handling practices. The issue resulted in a "significant, negative impact to same-store sales at both KFC and Pizza Hut in China over the past 10 days," YUM said in a filing Wednesday with the Securities and Exchange Commission. For the same reason, McDonald's Holdings Japan on Tuesday said it won't meet its 2014 sales targets and cannot offer a current estimate. McDonald's Japan trades separately from McDonald's Corp. MCD. The supplier, OSI unit Shanghai Husi, which counts both McDonalds and Yum among its customers, was shown in a Chinese television report earlier this month improperly handling food, and Shanghai's Food and Drug Administration subsequently launched an investigation. If the sales impact is sustained, "it will have a material effect on full-year earning," YUM said. YUM traded recently down 5.6 percent to $68.89; Papa John's Int'l, Inc. PZZA dropped 2.25 percent to $42; Country Style Cookng Restaurant Chain Co, CCSC declined 1.4 percent to $7.05 and Popeyes Louisiana Kitchen Inc. PLKI fell 1 percent to $40.78 a share.
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsFDAHotIntraday UpdateCCSCConsumer DiscretionaryMCDPKIPZZARestaurantsYUM
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!