Yum! Brands Loses Appetite After Mixed Earnings, China Sales Drop

Keep an eye on shares of Yum! Brands (YUM) in Wednesday’s trading session. The restaurant group released its mixed second-quarter financial results after the closing bell Tuesday. For the second quarter, the company posted a profit of 69 cents per share on revenue of $3.11 billion. Wall Street had expected the parent of KFC, Pizza Hut, and Taco Bell to report second quarter earnings of 62 cents per share on revenue of $3.19 billion, according to analysts polled by Thomson Reuters. In the same quarter of last year, Yum! Brands earned 73 cents per share on revenue of $3.2 billion. Analysts were expecting system wide same-store sales to rise by 0.3%, according to an estimate from Consensus Metrix. In addition, analysts had forecast that same store sales in China, a key segment for Yum, would take a hit from the continued perception issues after its supplier scandal last year. For the quarter, the company reported that comparable sales in China fell by 10%, worse compared to Wall Street forecasts for a drop of 8.4% year over year. Shares of Yum! Brands finished the regular session in the green, but turned red in after-hours trading on Tuesday, following the earnings release. TheStreet's Kurumi Fukushima reports in New York.