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China chicken scare pecks at Yum’s profit

NEW YORK — Yum Brands warned Monday that it expects its profit for the year to decline as the parent company of KFC, Pizza Hut, and Taco Bell continues to reel from a controversy over its chicken suppliers in China.

A drop in 2013 would snap an 11-year streak of profit growth of at least 13 percent.

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The company, based in Louisville, Ky., gave the grim forecast after its profit in the fourth quarter fell 5 percent, with a key sales figure in China dropping.

For January and February, the company expects sales at restaurants open at least a year in China to plummet 25 percent.

Since an investigation aired on national Chinese television on Dec. 18, Yum has been dealing with an ‘‘onslaught of negative media attention’’ over its chicken suppliers, spokesman Jonathan Blum said.

The TV station had reported that Yum’s suppliers were ignoring regulations and giving chickens unapproved levels of antibiotics.

A government investigation into the issue was concluded on Jan. 25 and Yum has agreed to adopt measures to strengthen its oversight of suppliers. But the company says it will take time to recover.

Even though Yum has far more locations in the United States, its restaurants in China are far more profitable because the cost of doing business there is lower and there’s much more room for growth.

For the period ended Dec. 29, Yum said net income fell to $337 million, or 72 cents per share. That’s compared with $356 million, or 75 cents, a year ago. Revenue rose 1 percent to $4.15 billion.

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