China bird flu threatens KFC parent Yum’s winning streak

KFC parent Yum Brands warned that a new bird flu outbreak in China badly hit restaurant sales there this month, even as the company also reported a sharper-than-expected slide in March sales in the country caused by the lingering impact of a separate food safety scare.

“Within the past week, publicity associated with avian flu in China has had a significant, negative impact on KFC sales,” the company said in a regulatory filing.

Yum did not quantify the impact.

The bird flu outbreak has already sickened 33 and killed ten people, as Chinese authorities try to clamp down on rumours about the deadly virus and its potential spread.

Yum reaps more than half its overall sales in China, where most of its nearly 5,300 restaurants are KFCs. It was already struggling in the country after chemical residue was found in a small portion of its chicken supply late last year.

“This will set them back a little bit. If those (bird flu casualty) numbers go up, then the impact could be longer,” said Edward Jones analyst Jack Russo.