Yum Brands Inc. Trims Profit Outlook

Yum Brands Inc. Trims Profit OutlookOn Tuesday the share prices of Yum Brands Inc. fell during extended trading as the parent company of Pizza Hut, KFC and Taco Bell missed its third-quarter results as expected by the Wall Street.

The troubled company is still reeling with the food scandal related to a meat supplier that affected the sales in China. The company says that it is very difficult to forecast the accurate curve of sales in that market.

The company has cut all its ties with the scandal ridden Shanghai Husi which is a subsidiary of OSI Group from Illinois. A spokesperson from the company said that is considering legal action against the supplier after the food scare.

Initially Yum expected its earnings to increase by 20 percent or more but now has cut it down to only 6 to 10 percent growth.

On Tuesday Yum said that, "sales typically take six to nine months to recover from these types of events."

When the scandal was unveiled Yum has already cautioned the investors that the falling sales would affect the shares.

The sales figures in China are very important to Yum, as it provides more than one third of the overall profits for the company. However the profits since last year in China have dropped by almost 40 percent.