By Lisa Baertlein
LOS ANGELES (Reuters) - Yum Brands Inc on Wednesday reported second quarter China sales that matched Wall Street expectations, as the owner of the KFC, Taco Bell and Pizza Hut brands prepared to spin the division off around Oct. 31.
Investors had worried about the fundamentals of Yum's China business, which recently posted bumpy results due to food safety scares and company missteps.
Yum shares jumped 3.7 percent to $85.74 in extended trading, after comments from Chief Executive Greg Creed appeared to ease such concerns.
"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," Creed said in a statement.
Sales at China restaurants open at least one year were flat with the year-earlier quarter.
China KFC restaurants, the majority of the 7,246 stores in the division, had a 3 percent rise in same-store sales in the second quarter, while the smaller and more upscale Pizza Hut Casual Dining chain posted a drop of 11 percent. Analysts had expected a 3 percent gain at KFC China and a 7.8 percent drop at Pizza Hut China.
Overall sales at China restaurants open at least one year were up 6 percent for the first quarter of this year, following a rise of 2 percent for both the third and fourth quarters of last year.
Yum reaps more operating profit from China than any other division.
