Public companies routinely add spin to profit reports, but disclosure from Yum Brands, the parent of KFC, deserves special mention. The firm asserts that political turmoil over the South China Sea provoked a decline in China-based earnings. Weird. We had trouble finding a KFC outlet among the atolls of the South China Sea. But regardless, the sales volume of any store there would pale in comparison to one in Beijing or Shanghai. Now there were protests at some KFC locations after the Permanent Court of Arbitration in The Hague ruled that China’s territorial claims over the South China Sea are spurious. But easier to blame that news, than to suggest that a weak Chinese economy has made US-style fried chicken a discretionary consumer expenditure, especially prior to a local IPO for the company. ■
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