During the company’s meeting in New York City, David Novak, Chief Executive Officer, said the company’s top priority is the turnaround in China.
Yum is considered as the biggest Western restaurant operator within China, owning the Pizza Hut and KFC chains with over 6,400 outlets. The company reaps a relative portion of sales and profits through its fast-growing market.
Up until Tuesday, the company reduced its profit estimate for the current year and for the second period, saying that China’s sales lesser than expected was due to a supplier scandal during the summer.
Yum’s new forecast called for a full-year profit increase, excluding special products. The company reduced the estimate by 6% to 10% from 20%.
Company sales at established Pizza Hut and KFC fell after the television news story, broadcasted in July 20 in China, alleging the Shanghai Husi supplier to be using meat past its expiration period.
Food safety is a major issue in China, rocking scandals further, specifically melamine-tainted dairies, which sickened thousands of customers as well linked to infant deaths in 2008.
In October, Novak said the company might take 6 to 9 months to recover sales in China after the scandal.