Fast Food Shares Down On China Chicken Supplier Scare

Fast food companies with exposure in China trended down Thursday after Yum Brands, Inc. YUM said a chicken supplier in its China market is under investigation for improper food-handling practices. The issue resulted in a "significant, negative impact to same-store sales at both KFC and Pizza Hut in China over the past 10 days," YUM said in a filing Wednesday with the Securities and Exchange Commission. For the same reason, McDonald's Holdings Japan on Tuesday said it won't meet its 2014 sales targets and cannot offer a current estimate. McDonald's Japan trades separately from McDonald's Corp. MCD. The supplier, OSI unit Shanghai Husi, which counts both McDonalds and Yum among its customers, was shown in a Chinese television report earlier this month improperly handling food, and Shanghai's Food and Drug Administration subsequently launched an investigation. If the sales impact is sustained, "it will have a material effect on full-year earning," YUM said. YUM traded recently down 5.6 percent to $68.89; Papa John's Int'l, Inc. PZZA dropped 2.25 percent to $42; Country Style Cookng Restaurant Chain Co, CCSC declined 1.4 percent to $7.05 and Popeyes Louisiana Kitchen Inc. PLKI fell 1 percent to $40.78 a share.