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Yum says KFC's sales decline in China is easing

Jun. 11, 2013 @ 10:31 PM

NEW YORK -- Yum Brands says a key sales figure for China dropped 19 percent in May, as the parent company of KFC began to see signs of recovery from the double whammy of a bird flu scare and an earlier controversy over its chicken supply.

The drop is an improvement from the 29 percent decline in April. The company said the latest figure reflects a 25 percent decline at KFC and 12 percent growth at Pizza Hut.

Yum Brands Inc. added that it expects sales at established restaurants to continue recovering over the course of the year and to turn positive in the fourth quarter. Although publicity around the bird flu continued to have a "significant, negative impact" in May, Yum noted that the impact of past cases of bird flu has been short-lived.

China is a critical region for Yum, which has benefited greatly from the country's rapid economic expansion in recent years. The company, based in Louisville, Ky., is the biggest Western fast-food operator in the country with 5,300 locations, most of them KFC restaurants. In 2012, Yum raked in more than half its total sales from China.

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