KFC China Boosts Yum! Brands’ Sales — Despite History Of Poor Performance

KFC China has boosted Yum Brands Inc.’s (conglomerate behind KFC, Taco Bell and Pizza Hut) sales worldwide by adding 6 percent to their totals, as shown by the business’ fourth quarter reports.

Yum! also Tweeted about their accomplishment

$YUM Reports Fourth-Quarter EPS Growth of 11%, Excluding Special Items: https://t.co/40w03zk6Zv

— Yum! Brands (@yumbrands) February 3, 2016

Business analysts only averaged Yum’s sales in China to increase just 1.9 percent, according to research firm, Consensus Metrix. According to Reuters, these statistics mean that Yum has earned $0.68 per share surpassing the initial estimates of $0.66 cents because of KFC China.

This significant boost of the KFC performance in China comes to Yum as a surprise. This past October, the business had planed to severe business ties in China due to the prevalent food scandals and marketing marketing errors.

Some of which garnered a substantial amount of negative press and the unwanted attention from activists and shareholders. CEO of Yum and KFC China, Greg Creed, blatantly disowned the Chinese franchises, while under fire.

“We are on track to complete the spin-off of our China Division.”

The Inquisitr reported on one of these instances in 2014 where a patron at a KFC in China discovered wriggling white worms in her Chicken.

After already consuming half a bucket of KFC chicken in China, disgusted customer Liu Tsai found tiny white maggots embedded into the piece of chicken.

She then called the KFC in China to dispute her unfortunate finding, only to be offered a free KFC combo meal as a condolence gift for her grief.

“I felt sick, and the last thing I wanted to do was eat another chicken meal from KFC.”

https://www.youtube.com/watch?v=QYlK5jn8S9U

Worm-infused chicken aside, Business Insider reported on the details of KFC China’s downward spiral as a business. The news site stated that KFC China’s sales were so bad that it is actually weighing down the rest of Yum brands, as sales in the U.S. were not rising either.

KFC China’s have been sinking over the last three year by a total of 10 percent, BI added.

Chinese KFC’s have also been guilty of using expired meat supplied by a Shanghai, China, butchering company. The Shanghai supplier had to shut down as a result, which further hurt U.S. Yum companies as well, Business Insider also reports.

And investors weren’t happy with the company’s hesitance to immediately begin withdrawing from the country either. But perhaps having some patience has paid off for Yum CEO Greg Creed because now KFC China reportedly has a net income of $275 million, or $0.63 per share, in their latest quarter, Reuters writes.

Last year the company lost $86 million, which equates to 20 cents per share.

So how did KFC China pull off such a feat?

No one can say for sure, but perhaps their recent lawsuit that they won against three Chinese tech firms helped with their struggle.

The Sydney Morning Herald reports that a Shanghai court has fined the tech firms for spreading rumors about KFC China using “mutant chicken” for their product. The firms doctored photos of deformed chickens with multiple wings and legs.

The attack was considered to have damaged KFC China’s already fragile reputation causing them even more economic loss by allowing images of the deformed chickens to be posted on their social messaging accounts, SMH reports.

KFC China filed suit against the companies themselves demanding a payout of 1.5 million yuan for the libelous attacks. Instead they rewarded 600,000 yuan ordered by the Shanghai court.

Nevertheless, KFC China was still pleased with the outcome of the case.

“We brought suit against these individuals for making false statements about the quality of our food and we are pleased with the outcome,” China-based Yum spokeswoman for KFC Cindy Wei said.

How do you think KFC China managed to exponentially increase their sales so much, so fast?

[Image via Shutterstock/testing]