China still drives profits at KFC parent
October 11, 2012
US fast-food conglomerate Yum Brands (YUM.NYSE, TGR.FRA), increased its annual profit forecast as a result of higher-than-anticipated earnings in the third-quarter, Reuters reported. Strong growth in China continued to drive sales and operating profits for the parent company of KFC, Taco Bell and Pizza Hut. The group’s sales increased 6% in the quarter, boosted by menu price increases. Third-quarter results also showed a 0.1 percentage point increase in restaurant margin to 21.4% despite wage increases of 8% and commodity price increases of 2%. Yum shares rose to US$72 on Wednesday. The brand intends to open two new restaurants a day in China, although it expects commodity deflation in the next quarter. “Our annual performance has been pretty consistent and I expect this to continue,” said Yum chairman and CEO David Novak.