Yum warns on 2013 as chicken scare hurts KFC

04/02/2013 - 23:09

(Reuters) - KFC parent Yum Brands Inc on Monday warned that it expects 2013 per-share earnings to shrink rather than grow, as it grapples with a food safety scare that ensnared some of its chicken suppliers in its top market.

The company, which gets more than half of its overall sales and operating profit from China, reported a 6 percent drop in fourth-quarter sales at established restaurants in China due to "adverse publicity" regarding its poultry supply.

As a result, Yum forecast a "mid-single digit" percentage decline in earnings per share for 2013. Yum previously forecast 2013 earnings per share growth of at least 10 percent.

Yum has nearly 5,300, mostly KFC, restaurants in China.

Shares in the company fell 4 percent to $61.40 in extended trading.

(Reporting By Lisa Baertlein in Los Angeles; Editing by Leslie Gevirtz)