Shares in Yum Brands, which owns KFC and Pizza Hut, fell more than 17% in after-hours trading in the US after the firm reported poorer than expected results for the three months to 5 September.
Yum also lowered its full-year earnings growth forecast in its key market of China.
The firm blamed a stronger US currency against the yuan for its poor results.
But it also still recovering from a food scandal last year.
The group’s KFC restaurants in China suffered in July last year after a television news story linked the brand to supplier Shanghai Husi Food, which was accused of selling meat that was out of date.
“The pace of recovery in our China Division is below our expectations,” said Chief executive Greg Creed in a statement.
“While it remains difficult to forecast China sales, we are now estimating full-year same-store sales to be low single-digit negative,” the firm said.
“Given a slower-than-expected recovery in China sales, particularly at Pizza Hut Casual Dining, as well as stronger foreign exchange headwinds, we now expect full-year EPS (earnings per share) growth to be low-single-digit positive.”
Globally, Yum Brands reported third-quarter earnings per share growth of 14%, with adjusted third-quarter earnings of $1 (£0.65) a share and revenue of $3.43bn (£2.25bn).
Expectations were for earnings per share growth of $1.06 per share and revenue of $3.67bn.