: Yum China stock drops 9% after KFC operator sees ‘softening’ demand

Yum China Holdings Inc. YUMC shares fell more than 5% in the extended session Tuesday after the owner of Pizza Hut, KFC and other fast-food brands in China missed Wall Street expectations for its third quarter, saying that “softening consumer demand” emerged in recent weeks. Yum China earned $244 million, or 58 cents a share, compared with $206 million, or 49 cents a share, in the year-ago period. Adjusted for one-time items, Yum China earned 59 cents a share. Revenue rose 9% to $2.91 billion, from $2.68 billion a year ago. Same-store sales increased 4% year over year, including 4% increases at KFC and 2% at Pizza Hut, the company said. Analysts surveyed by FactSet expected the company to report adjusted earnings of 65 cents a share on sales of $3.12 billion. Results were “robust results despite macroeconomic headwinds,” Chief Financial Officer Andy Yeung said in a statement. Same-store sales growth was “solid” but “we observed softening consumer demand emerged in late September through October,” the executive said. “Looking ahead, the fourth quarter is a seasonally small quarter in terms of sales and profits; hence small fluctuations in sales could have a more pronounced impact on our margins.”

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