Yum Brands (YUM) warns about weak sales in China

Parent company of KFC, Pizza Hut and Taco Bell, Yum Brands Inc. (YUM) surprised investors, warning that sales in China have recently softened, and the fast-food chain gave a weaker-than-expected earnings growth outlook for next year.

Louisville, Ky.-based Yum said it expects this weakness to be offset by results from other overseas markets and its U.S. division. But its projection that per-share earnings, excluding special items, will rise 10% next year fell short of the 14% growth recently projected by analysts polled by Thomson Reuters.

Yum has been one of the most successful foreign companies in China, with roughly 5,000 restaurants in the country—more than other American fast-food chains have built. While that is far fewer than the 18,000-plus locations it has in the U.S., Yum's much faster growth rate and quicker return on investments in China has made that division arguably the company's most important.