China's latest bout with a new strain of avian influenza does not bode well for Yum! Brands, the company said in its 8-K filing with the Securities and Exchange Commission on Wednesday. March same-store sales declined an estimated 13% for their China operations. This included an estimated decline of 16% at KFC and a 4% growth at Pizza Hut. Within the past week, publicity associated with bird flu in Shanghai and surrounding areas has had a negative impact on KFC sales, the company said. "Historically in these situations, we have educated consumers that properly cooked chicken is perfectly safe to eat, and we will continue to do so," the company said in its filing. Further updates regarding Yum! Brands' China sales will be released with first quarter earnings on April 23, 2013. April same-store sales for China will be released on May 10 after market hours. So far, the share price of Kentucky-based Yum! Brands has held up okay from the scare. The stock is up around 0.8% over the last five days but down 1.82% over the last month. China is Yum's most lucrative market. According to its third quarter report, China accounted for more than half of its overall revenue of $3.57 billion, and the country also generated around 40% of Yum's profit. Since opening its first KFC branch on the Chinese mainland in 1987, Yum has nearly 5,000 restaurants in more than 800 Chinese cities. Over the last month, 43 people from Anhui, Jiangsu and Zhejiang provinces and Shanghai have been diagnosed with the new H7N9 strain of bird flu. Eleven people have died, most of them in Shanghai, the World Health Organization said Friday. New cases are popping up daily. On Friday, Beijing News reported that people carrying the H7N9 virus may have entered Beijing in recent days from East China due to an increased flow of tourists, but no cases of bird flu have been reported there as of Friday. While this is a new strain of bird flu, WHO said there has been no evidence of human to human transmission. And even though the disease does not survive in cooked meats, many restaurants in Shanghai have outright banned selling poultry dishes in an attempt to curb fears by the public.
Reported by Forbes.com 5 hours ago.
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