Business

Yum Brands raises profits outlook ahead of China spin-off

KFC restaurant Image copyright AFP

Yum Brands, parent company of fast-food chains KFC and Pizza Hut has reported sales of $3bn (£2.3bn) for the second quarter of 2016.

The firm raised its outlook for the full year, expecting a 14% increase in core operating profit.

Yum also said it was on track to spin off its China unit, aiming at October for the start of Yum China.

China is a key market for Yum and the company's shares jumped 4.6% in New York in after hours trading.

Sales in China, at restaurants open at least one year, rose by 6% in the first quarter of the year, up from a 2% increase for both the third and fourth quarters of last year.

"Our China division is off to a good start in the third quarter for both KFC and Pizza Hut Casual Dining, including a return to positive same-store sales at Pizza Hut Casual Dining in recent weeks," chief executive Greg Creed said in a statement.

Earnings in China had in the past been set back by a food safety scandal involving a meat supplier, as well as increased competition.

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