NEW YORK, Feb. 20, 2013 /PRNewswire/ -- Bernstein Liebhard LLP today announced that a securities class action has been commenced in the United States District Court for the Central District of California on behalf of a class (the "Class") of purchasers of Yum! Brands, Inc. ("Yum" or the "Company") (NYSE: YUM) securities between October 9, 2012 and January 7, 2013 (the "Class Period").
Plaintiffs allege that Yum and certain of its officers and directors violated the Securities Exchange Act of 1934. Yum describes itself as the world's largest quick service restaurant company, which, through the three concepts of KFC, Pizza Hut and Taco Bell, develops, operates, franchises and licenses a worldwide system of restaurants. Yum's business consists of four reporting segments: the China Division, the India Division, Yum! Restaurants International, and the United States Division.
The complaint alleges that during the Class Period, defendants made materially false and misleading statements concerning Yum's current and future business and financial condition. As a result of defendants' misleading statements, Yum common stock traded at artificially inflated prices during the Class Period, reaching over $74 per share.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 November 29, 2012, the Company announced that its previous forecast of single-digit to flat China Division same-store sales growth would not be met; instead, the Company expected to report China Division same-store sales of -4%. On these disclosures, Yum's stock price fell nearly 9% to close at $67.08 per share on November 30, 2012. Then, on December 20 and 21, 2012, news reports began to circulate that Yum knew well before the Class Period that certain chicken suppliers in China had injected chickens with excessive antibiotics and other illegal chemicals, but sought to conceal these facts. These disclosures caused Yum's stock price to drop further to a close of $63.88 per share on December 21, 2012. Finally, on January 7, 2013, the Company filed a Form 8-K with the SEC updating its full year 2012 guidance for same-store sales for its China Division, stating that it was lowering its financial outlook due to publicity surrounding the Chinese government's review of its poultry supply. As a result of the January 7, 2013 disclosures, on January 8, 2013, Yum shares dropped 5% from $67.89 per share to as low as $64.40 per share. According to the complaint, the representations by defendants concerning the Company's current business and financial condition were each materially false and misleading when made, because defendants failed to disclose: (a) slowing economic trends in China were stronger than reported and could not support the forecasted sales results for the Company's China Division or the Company-wide increased earnings per share growth; (b) Yum's own food safety inspections had already found that Chinese chicken supplier Shandong Liuhe Group ("Shandong Liuhe") had sold the Company chickens with high levels of antibiotics and other illegal drugs and/or chemicals; and (c) the Company had continued to buy products from Shandong Liuhe until as late as August 2012. Plaintiffs seek to recover damages on behalf of all Class members who invested in Yum securities during the Class Period. If you invested in Yum securities as described above during the Class Period, and either lost money on the transaction or still hold the shares, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than March 25, 2013. A "lead plaintiff" is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.