Yum warns of challenges ahead as 1Q profit falls

Yum! Brands Inc. reported a 14-percent drop in first-quarter profit on negative effects of a stronger U.S. dollar and slowed domestic sales, especially at Pizza Hut and KFC.

Yum, one of the world's largest restaurant companies, said Wednesday that more of the same is in store, as currency exchange rates will continue to hurt reported revenue and profit, and consumer spending shows no immediate signs of increasing. The company's U.S. same-store sales for the first quarter ended March 31 fell 2 percent.

“We forecast the [current] second quarter will likely be Yum’s most challenging quarter and the low point of our year,” said David Novak, chairman and chief executive at Yum.