Yum! Brands Inc., parent company to fast food restaurants like KFC, Taco Bell and Pizza Hut, suffered from dwindling shares in China, after it reported its third-quarter of 2015 stats.
As reported by Reuters, the company saw it shares down by 17 percent and cited the slower-than-expected recovery in China and, in addition, the drag from a strong U.S dollar, as reasons.
Chief Executive Greg Creed said, "The pace of recovery in our China Division is below our expectations."
To be specific, the direct reason the American fast food company experienced the drop in China, its key market, is due to managing an economic slowdown and a food scandal.
KFC and Taco Bell's parent company suffered a decline following an incident last July 2014 in which it allegedly received expired meat from a minor supplier.
However, there some good takeaways regarding the status of the company. As reported by the International Business Times, the fast food giant reported a 4 percent annual increase in revenue for the three months to 5 September of $3.43bn billion, just falling short of a Thomson Reuters forecast for sales of $3.68 billion.
Net profit also saw an increase as it was reported to have gained an increase of 2 percent to $421 million with earnings per share (EPS) at $0.95.
Creed further said, "Our growth fundamentals in China, including new-unit development, remain intact. However, we're experiencing unexpected headwinds, making the second half of the year more challenging than we anticipated."
The CEO also said that outside of China, Taco Bell and KFC divisions are enjoying a sustainable sales momentum while their Pizza Hut brand was in a relative plateau.
In other reports. Yum! Brands sale in China were up by 8 percent just last year while same-store sales, which excluded sales from newly-opened stores, were up by 2 percent.
As Yum! Brands continued to experience dwindling sales, Fox Business noted that after the CEO's statement hit wire sources, Senior Vice President Jonathan Blum quickly explained that, "The recovery in China is continuing, just at a slower-than-expected pace."
He added, "We've had a combination of two things: First, external factors, including macro challenges in China, have hurt the casual dining industry. Second are internal factors, including the way we've executed some marketing promotions there."