Yum! Brands Cuts Outlook On Slow Recovery In China

Yum! Brands Inc. YUM tumbled in Tuesday's extended session after the company cut its outlook and said sales in China are recovering at a slower-than-expected pace.

Louisville, Kentucky-based Yum changed hands recently at $72 a share, down more than 4.28 percent.

The operator of KFC, Taco Bell and Pizza Hut restaurants forecast full-year 2014 earnings growth in the mid-single digits, down from its October forecast of 2014 earnings growth between 6 percent and 10 percent.

The company also expects 2015 adjusted earnings growth of "at least 10 percent" from 2013's adjusted earnings of $2.97 a share.

Wall Street expects 2015 earnings of $3.78 a share.

Yum's China operations account for more than half of its total revenue. Sales there were hurt by news that emerged June 21 about improper food handling by former suppliers in China.

Chief Executive Greg Creed said Tuesday that Yum will open 2,100 new international restaurants next year "and produce consistent double-digit EPS growth over the long term.”

"We estimate China Division full-year same-store sales will be negative mid-single digits. With this assumption, we now estimate mid-single-digit full-year EPS growth, excluding Special Items."