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Yum’s KFC and Pizza Hut facing disappointing results in China

Yum in China

Yum Brands Inc's disappointing results from restaurants in China including KFC and Pizza Hut add pressure on Chief Executive Greg Creed to make swift changes to the business that is its main driver of sales and profit, analysts said on Wednesday.

分析师7日表示,百胜集团(Yum Brands)包括肯德基(KFC)和必胜客(Pizza Hut)在内的中国业务业绩令人失望,让公司CEO Greg Creed倍感压力,必须对作为公司营收和获利主要动力的这块业务作出迅速调整。


Yum shares sank as much as 19.3 percent on Wednesday, a day after the company shocked investors by cutting its forecasts due to weakness in China. While China's economy is cooling, Yum management also blamed internal missteps at its upscale Pizza Hut Casual Dining chain.



The results come as hedge fund Corvex Management is urging Yum to spin off its 6,900-restaurant China business and prompted new calls for Creed to adopt a fresh strategy. Corvex did not respond to requests for comment.

与此同时,对冲基金Corvex Management一直在敦促百胜分拆在中国的6900家餐厅业务,并再度呼吁Creed采行新策略。Corvex没有回应置评请求。


"The stock is saying people are giving up on Yum. It will not change until management changes its strategy," said Hedgeye Risk Management analyst Howard Penney. At least six brokerages cut their stock price targets on Yum. Notably, Stifel went to $100 from $110 and Nomura to $82 from $106.

"股价表现说明,投资者在放弃百胜集团。在管理层调整业务策略之前,公司不会发生改变,"Hedgeye Risk Management分析师Howard Penney表示。至少有六家券商调降百胜集团的股价目标,其中Stifel从110美元调降为100美元,野村从106美元降至82美元。


Shares in Yum closed at $67.71, slightly above their session low of $67.20.



Penney and other analysts say the China stumble gives proponents of a China spin-off more ammunition. Some also are calling on Yum to slow new restaurant development in China and to start selling existing units there to franchisees. "Spin off China, sell stores, do something," Penney said.



Creed took the helm of Yum on Jan. 1 after leading a successful revamp of the company's Taco Bell chain. He was charged with turning around the China business, where sales have slumped since news in July 2014 that one of its suppliers used meat that was past its expiration date.

Creed今年1月1日接掌百胜,此前带领公司旗下的塔可钟(Taco Bell)餐饮连锁店成功翻盘。现在他被委以扭转中国业务状况的重任。2014年7月使用过期肉的消息传出后,百胜旗下餐馆在中国的销售大幅下降。


He declined to comment on any strategic changes during a conference call with analysts and investors on Wednesday.



Creed said newly appointed management for the China business would bring fresh ideas and double down on profitable value meals to lure diners shocked by recent financial turmoil in the country.



China's Pizza Hut Casual Dining chain was hit particularly hard during its latest quarter as local businesses cut back on parties and events. Competition from online ordering companies that are operating at a loss also contributed to weak sales.



That business accounts for one-third of profits from the China division, which is dominated by the KFC brand.



Yum China contributed 57 percent of the company's overall revenue and 54 percent of its $603 million operating profit in the latest quarter. Yum executives stood by plans to add about 700 new restaurants in China this year.



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