By P.R. Venkat

Yum China's shares fell sharply early in Hong Kong after the company's third-quarter results failed to meet expectations, and it warned of a drop in consumer demand.

The stock hit a 12-month low of 348 Hong Kong dollars (US$44.48) on Wednesday morning, mirroring its weak performance on the New York Stock Exchange overnight.

The owner of Pizza Hut, KFC, and other fast-food brands in China said its third-quarter net income rose 18% on the year to US$244 million. That compared with the US$278.0 million consensus estimate from a FactSet poll of analysts.

Its adjusted diluted earnings per share was US$0.59, while analysts surveyed by FactSet had expected the company to report adjusted earnings of 65 U.S. cents a share.

Andy Yeung, chief financial officer of Yum China, said that the company was seeing softening consumer demand that had emerged in late September and persisted through October.

"Looking ahead, the fourth quarter is a seasonally small quarter in terms of sales and profits; hence, small fluctuations in sales could have a more pronounced impact on our margins," the executive said.

Shares are currently down 13.0% at HK$357.80, on track for their sharpest daily drop since March last year.

Write to P.R. Venkat at venkat.pr@wsj.com

(END) Dow Jones Newswires

October 31, 2023 23:26 ET (03:26 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.
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