Yum Brands Inc, which gets about half of its revenue from China, said third-quarter same-store sales in the nation fell about 13 percent following a probe into one of its suppliers.
Sales at both its KFC and Pizza Hut locations in China were hurt by publicity after OSI Group LLC was investigated for changing sell-by dates on food, the Louisville, Kentucky-based Yum said in a filing with the US Securities and Exchange Commission.
Yum also said it's planning to take legal action against OSI and its Shanghai Husi unit to recover damages.
"While sales are beginning to rebound, they continue to be negative," Yum said in the filing.
"Our brands have proven resilient over time, and we expect this to be the case with this situation as well."
Yum Brands, which was starting to rebound from a supply chain investigation in China that started in 2012, was hit by another food scare in the country in July when Husi became the subject of a government probe into the altering of expiration dates on food.
The restaurant chain terminated its relationship with OSI globally after the investigation.
Yum, which also owns Taco Bell, saw its shares fall 3.5 percent to $69 at the closing bell on Wednesday in New York.
The stock has lost 5.5 percent this year through the close of regular trading last year.
The company is scheduled to report full results for the third quarter, which ended on Sunday on Oct 7.
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