Yum Brands is crashing

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REUTERS/Joe Tan

Yum Brands is the latest reason to be worried about China.

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Shares of the fast-food giant fell as much as 19% in after-hours trading Tuesday after the company reported earnings below expectations and cut its outlook.

Yum Brands is seen as a bellwether for the Chinese economy, given that about 54% of its sales were derived from the country.

"While it remains difficult to forecast China sales, we are now estimating full-year same-store sales to be low-single-digit negative," the fast-food giant said in its third-quarter earnings statement.

"The pace of recovery in our China Division is below our expectations," Yum Brands said.

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CEO Greg Creed said the company faced more challenges than it had expected in the second half of the year in China. Still, same-store sales in China increased 2% and restaurant margins were 20%.

The company's restaurant chains include KFC, Taco Bell, and Pizza Hut. It reported adjusted earnings per share of $1, versus the estimate for $1.06 according to Bloomberg. Revenues came in at $3.43 billion, versus $3.67 expected.

The stock is up 14% year-to-date.

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