Yum China: Latest Outbreak Weighs on 2Q Results, Company Plan More Locations
July 28 2021 - 5:10PM
Dow Jones News
By Maria Armental
Yum China Holdings Inc.'s second-quarter financial performance
reflected improved business activity in China even as the virus
resurgence in some areas continued to weigh on operations,
particularly in transportation and tourist locations.
Same-store sales, a key sales metric, rose 5% in the latest
period, adjusted for currency conversion, and driven by Pizza
Hut.
Second-quarter profit rose to $181 million from $132 million a
year earlier. On a per-share basis, it reported profit and adjusted
profit of 42 cents.
Total revenue rose to $2.45 billion from $1.9 billion a year
earlier.
Analysts surveyed by FactSet expected an adjusted profit of 44
cents a share on $2.45 billion in revenue.
Yum China now expects to open about 1,300 new locations and
spend $700 million to $800 million this year in capital projects,
up from its previous view of opening about 1,000 new locations and
spending about $600 million in capital projects.
The company said the recovery to pre-pandemic levels was
interrupted by a Delta variant outbreak in southern China that, at
the peak of the outbreak, caused some 400 locations to close
temporarily or offer only delivery and pickup only.
"This represents nearly 30% of our restaurants in Guangdong
province, which has two of the four tier one cities in China, is
the largest economy in China and one of Yum China's largest
markets," the company said in a statement.
Sales at transportation and tourist locations improved from the
previous quarter but remain well below pre-pandemic levels, the
company said.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
July 28, 2021 17:03 ET (21:03 GMT)
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