NEW YORK (TheStreet) -- Ahead of its annual investor meeting on Wednesday, Yum! Brands (YUM) provided full-year estimates which left much to be desired. However, a comeback next year could see the company hit its stride.
The owner of KFC, Pizza Hut and Taco Bell said it expects full-year 2013 earnings to see a high-single to low-double digit decline from a year earlier. In 2014, though, the company expects earnings-per-share growth of 20%.
"We expect to have a strong bounceback in 2014 following a year that is clearly below our high expectations. In China, we have an aggressive plan to reignite sales at KFC and we expect continued strong performance at Pizza Hut Casual Dining," said CEO David C. Novak.
Yum!'s division in China, which is the company's largest market, has been suffering recently as operating profit dropped off on fears surrounding an avian bird flu crisis in Hong Kong and China. As a result, Hong Kong instituted a public health alert and temporarily banned the import of live chickens from the mainland.
November same-store sales in China increased a meager 1%. KFC sales came in unchanged, despite a 16% increase over the first 10 days of the month thanks to a half-price chicken bucket promotion. For the remainder of the month, same-store sales were down 8%.
As the division recovers, Yum! predicts operating profit to grow at least 40% over 2014. A recovery in the division is crucial given China accounts for half of Yum's total operating profit.
The company expects to open at least 1,850 new restaurants outside the U.S., strengthening its leadership position in emerging markets. Of the new restaurant openings, Yum! will open 700 in China and 150 in India. At the end of the third quarter ended Sep. 7, Yum! had 4,500 KFC outlets in China.