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Yum Brands Eaten Alive On Poor China Earnings

ByWall Street Sector Selector
AuthorJohn Nyaradi
Published 10/10/2013, 02:01 AM
Updated 05/14/2017, 06:45 AM

Yum Brands gets pummeled on China Warning
Yum Brands (YUM) parent company of KFC, Taco Bell, Pizza Hut, and WingStreet plunged more than 6% on Wednesday after warning that the company’s sales in China would take a long time to recover.

The China (FXI) outlook is bad news for YUM! (YUM) as 50% of the company’s profits come from China.

The problems have been caused by the recent bird flu outbreak in Asia along with a slowing economy in China that is dampening consumer spending.

Yum (YUM) sales were down more than 10% for Q3 in its 6,000 restaurants in China.

Yum Brands is also included in the SPDR Consumer Discretionary ETF (XLY) which fell .37% on Wednesday and is down sharply from its recent highs.
YUM Brands Daily
On the chart of Yum Brands (YUM) we can see yesterday’s plunge which took the stock below both it’s 50 and 200 day moving averages.

The chart of SPDR Select Consumer Discretionary (XLY) also shows recent weakness, dropping sharply from recent highs and breaking its 50 day moving average.
XLY Daily
Bottom line: Yum! Brands (YUM) takes a big hit on China sales and the company also serves as a bell whether for the general health of the consumer discretionary sector which shows growing weakness in China and the United States.

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