KFC parent Yum Brands Inc says a key sales figure for its China unit fell 13 per cent in July, which is slightly worse than the drop the previous month.

The company, based in Louisville, Kentucky, had reported a 10 per cent drop in June as it worked to recover from the double whammy of a supplier controversy over its chickens and a bird flu scare.

That had suggested a recovery, given the 19 per cent drop in May.

Yum says it still expects sales at established restaurants to continue recovering over the course of the year and to turn positive in the fourth quarter.

China is a critical region for Yum, which is the biggest Western fast-food operator in the country.

Yum shares fell $US2.84, 3.8 per cent, to $US71.63 in after-hours trading.

AP