08.10.2014 - Yum Brands reduced its sales in China
Yum Brands Corporation announced falling sales in restaurants of the company in China by 14%. The reason for the decline in sales was the scandal about the safety of food in restaurants in China, which was triggered by the deliveries of overdue meat in different chains of restaurants. It is worth noting that the company this year has reduced the growth forecast for earnings per share to 6-10%, against a previous forecast of growth of 20%. Outside China and India sales increased by 6%, which allowed the company to get 404 million dollars in profit, or 89 cents a share, 1 cent better than analysts' expectations. Based on the positive results of the company and the gradual recovery of sales in Asia, we recommend to include the company's shares in the long-term portfolio with growth potential up to 20-25% per year.