YUMC - Yum China falls after reporting Q2 results; sales miss estimates
2023-07-31 16:52:14 ET
Yum China Holdings, Inc. ( NYSE: YUMC ) reported mixed results for the second quarter. Shares fell 3.3% after the close.
The fast food company said EPS came in at $0.47 compared to the average analyst estimate of $0.44, while revenue of $2.65B was worse than the expected $2.72B.
Revenue rose 25% from a year earlier and growth was mainly attributable to same-store-sales, the company said in a press release. The fast food chain said 422 net new stores opened during the quarter for a total of 13,602. Operating profit was up 216% and restaurant margin rose 16.1%.
"We achieved outstanding results, delivering substantial growth in the top-line and bottom-line, in the second quarter, thanks to our teams' dedication and creativity,” Chief Executive Officer Joey Wat said in a statement.
The CEO touted the group’s “anti-fragile business model and ability to capture opportunities in good times and stay resilient in bad times.” Wat said operating profit for the first half of the year already exceeded all of 2022.
Pizza Hut has more than 3,000 stores in China and KFC exceeded 500 stores in Shanghai alone, with YUMC on track to meet expansion goals for the year.
The CEO was optimistic, saying, “ We see abundant white space in China. With a presence in 1,900 cities, we are still tracking over 800 cities without a KFC. Similarly, Pizza Hut has a great potential for expanding its footprint.”
Chief Financial Officer Andy Yeung said YUMC is focused on driving sales in the third quarter.
“But, it is worth noting that last year's record third-quarter restaurant margins set a relatively high benchmark, due to austerity measures and temporary reliefs,” Yeung said.
The shares have 13 Strong Buy ratings from Wall Street analysts, nine Buys, two Holds and one Strong Sell.
Shares of YUMC are up about 8% so far in 2023.
More on fast food stocks:
- KFC China hits milestone store count in Shanghai
- Pizza Hut Delivers Growing Slice Of Yum China's Pie
- Yum! gains as UBS says more to come with Taco Bello-Paris Hilton partnership, return of Beefy Crunch Burrito
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Yum China falls after reporting Q2 results; sales miss estimates