Business Intelligence on Retailing, Franchising, and Consumerism in China

Yum Sees Increased Avian Flu Impact In China

Yum Brands Inc. said that sales in the company's international division system sales rose 3%, according to a news release. Sales in the China division rose 1% after conversion to U.S. dollars, or decreased 1% prior to conversion to U.S. dollars.

The company expects 2005 earnings per share to increase by 12%, exceeding its target of at least 10%, according to a news release.

"Our global portfolio and global expansion continue to consistently drive strong results in spite of a slower than expected sales recovery in mainland China," chairman and CEO David Novak said in a news release. "Sales there have been impacted recently by consumers' concerns about avian flu, despite the fact that the World Health Organization and other health experts have stated that properly cooked chicken is perfectly safe to eat.

"Even in this environment, our EPS expectation remains 78 cents per share for the fourth quarter given the balance of our global portfolio," he said. "Our confidence is driven by better-than-expected same-store-sales growth in the U.S.A. and strong performances by our international franchise markets."

Yum expects to open at least 1,500 new system worldwide next year, including 750 in the international division, 400 in the China division and 350 in the United States.

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