Yum! Brands warned yesterday that it expects its profit for the year to decline as the parent company of KFC, Pizza Hut and Taco Bell continues to reel from a controversy over its chicken suppliers in China.
The company, based in Louisville, Ky., gave the grim forecast after its profit in the fourth quarter fell 5 percent, with a key sales figure in China dropping.
For January and February, the company expects sales at restaurants open at least a year in China to plummet 25 percent.
Since an investigation aired on national Chinese TV on Dec. 18, Yum! has been dealing with an “onslaught of negative media attention” over its chicken suppliers, spokesman Jonathan Blum said. The TV station had reported that Yum!’s suppliers were ignoring regulations and giving chickens unapproved levels of antibiotics.
A government probe was concluded on Jan. 25 and Yum! has agreed to adopt measures to strengthen its oversight of suppliers. But the company says it will take time to recover.