Yum China sales hurt by supplier probe

Yum Brands (YUM.NYSE), the owner of KFC and Pizza Hut, saw its sales fall by more than expected in China in the fourth quarter following a government probe of a former supplier, Bloomberg reported. The company’s same-store sales in China decreased 6% in the fourth quarter, exceeding its earlier estimate of 4%, according to a filing with the US Securities and Exchange Commission. This came after local authority confirmed that Liuhe Group had supplied batches of chicken containing illegally high level of antibiotics to Yum in 2010 and 2011. Yum said it had stopped using the supplier in August, before media reports emerged. Yum also reported preliminary 2012 profit of US$3.24 per share in the filing, lower than analysts’ average estimate of US$3.26. It is scheduled to report fourth-quarter and full-year results for 2012 on February 4.