Yum Sales Fall 3%, $6.2 Billion To Be Returned To Shareholders Before China Separation

Yum! Brands, Inc. YUM sales fell 3 percent on Thursday. The company will return $6.2 billion to its shareholders between the separation announcement date of October 20 and the actual business separation, which is expected to be completed by the end of 2016.

For 2016, Yum also released its forecasting guidance for the year. The restaurant chain's operating profit growth, excluding currency impacts are expected to be of 10 percent. The company is also expecting currency to have a -2 percentage point impact on operating profit.

Shares traded recently at $72.19, down 2.2 percent.

In conjunction with Thursday's conference, Yum Brands had also confirmed its predicted forecast of nearly flat to low-single-digit positive full-year 2015 EPS growth. This excludes Special Items; provided an operating profit outlook for 2016; and reported China same-store sales for November. Yum also reaffirmed its fourth-quarter China same-store sales guidance.

The restaurant chain has been hit by numerous marketing mistakes and food scandals in China. Yum will discuss in further the detail of its separation into two independent companies at Annual Investor Conference on Thursday. The company is expected to talk in more detail of its planned separation into two independent publicly-traded companies. Both of the companies have strong growth prospects. Yum will outline how the separation transaction will enable the restaurant chain to successfully transform.

One of the company's has a previous growth target of nearly 10 percent EPS growth into two companies each targeting an estimated 15 percent shareholder return per year. Additionally, Yum will follow through on its dedication to returning substantial capital to shareholders alongside with its business separation.

Yum's same-store sales fell 9 percent at Pizza Hut restaurants and 1 percent at KFC outlets.