Yum Brands Inc (YUM.N), the owner of KFC and Taco Bell, reported a smaller-than-expected rise in quarterly sales at established restaurants worldwide as fewer diners ate at its Pizza Hut restaurants.

The company, which spun off Yum China Holdings Inc (YUMC.N) late last year, said same-store sales rose 2 per cent in the second quarter ended June 30, missing the 2.2 per cent rise analysts polled by Consensus Metrix had expected.

The Pizza Hut division, which has been off-setting strong growth at KFC and Taco Bell, reported its fourth-straight quarterly same-restaurant sales decline, falling 1 per cent in the reported quarter. It, however, beat the 1.5 per cent decline expected by analysts, according to research firm Consensus Metrix.

KFC and Taco Bell continued to show strong same-restaurant growth around the world, rising 3 per cent and 7 per cent, respectively. Both beat analysts' expectations.

Net income from continuing operations fell to US$206 million, or 58 cents per share, in the second quarter, from US$266 million, or 64 cents per share, a year earlier, hurt in part by higher expenses related to sprucing up its Pizza Hut stores.

Excluding items, the company earned 68 cents per share. Net sales fell 4 per cent to US$1.45 billion.

Analysts on average had expected earnings of 61 cents per share and revenue of US$1.42 billion, according to Thomson Reuters I/B/E/S

Shares of the Louisville, Kentucky-based company were down 0.7 per cent in premarket trading.