Glancy Binkow & Goldberg LLP announces that a class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of a class (the “Class”) comprising all purchasers of the publicly traded securities of Yum! Brands, Inc. (“Yum” of the “Company”) (NYSE:YUM) between October 9, 2012 and January 7, 2013, inclusive (the “Class Period”). The Complaint alleges that throughout the Class Period the Company and certain of its executive officers issued materially false and misleading statements regarding the Company’s business and financial prospects.
YUM, together with its subsidiaries, operates quick service restaurants in the United States and internationally under the KFC, Pizza Hut and Taco Bell brands. On November 23, 2012 reports in the Chinese media disclosed that certain of the Company’s chicken suppliers had been feeding toxic chemicals to chickens sold to KFC China. On December 20 and 21, 2012 news outlets reported that the Company knew well before October 2012, but sought to conceal, that certain chicken suppliers in China had injected chickens with excessive antibiotics and other illegal chemicals.
Then, on January 7, 2013, in a filing with the SEC the Company lowered its China Division’s full-year 2012 guidance for same-store sales, due to publicity surrounding the Chinese government’s review of Yum’s poultry supply. As a result of these disclosures, on January 8, 2013 Yum shares dropped 5%, from $67.89 per share to as low as $64.40 per share.
The Complaint alleges that throughout the Class Period the defendants misrepresented and/or failed to disclose that: (1) slowing economic trends in China were stronger than reported and could not support Yum’s China Division’s forecasted sales results or the Company’s increased earnings-per-share growth; (2) defendants knew but concealed that the Company’s own food safety inspections had already discovered high levels of antibiotics and other illegal drugs and/or chemicals in chickens purchased from a Chinese supplier -- Shandong Liuhe Group; and (3) Yum had continued to buy products from Shandong Liuhe Group until as late as August 2012.