Yum's November Same-Restaurant Sales in China Fall 15%

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Yum Brands Inc (YUM) said on Thursday its sales at established restaurants in China dropped 15 percent in November but are improving from that level this month.

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"Our No. 1 priority is the China turnaround," Chief Executive Officer David Novak said at the company's investor and analyst conference in New York City.

Yum, the owner of the KFC and Pizza Hut chains, is the largest Western restaurant operator in China, with more than 6,400 outlets. It reaps a significant portion of its sales and profits from the fast-growing market.

On Tuesday, Yum lowered this year's profit forecast for the second time, citing a slower-than-expected sales recovery in China following a supplier scandal this summer.

The company's new forecast called for full-year profit growth in the mid-single digits in percentage terms, excluding special items. It had cut the forecast to 6 percent to 10 percent from at least 20 percent.

Sales at established KFC and Pizza Hut restaurants tumbled after a July 20 television news story in China alleged that supplier Shanghai Husi was using meat that was past its expiration date.

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Yum said it did only a small percentage of its business with the supplier at the center of the scandal and quickly cut ties with the firm's parent, major U.S. meat supplier OSI Group LLC.

Food safety is a hot-button issue in China, which has been rocked by scandals, particularly involving melamine-tainted dairy products that sickened thousands of people and were linked to the deaths of six infants in 2008.

Yum CEO Novak said in October it could take six to nine months for China sales to recover from the scandal.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Jeffrey Benkoe)