Yum China Q3 2020 Earnings Report
Key Takeaways
Yum China's total revenues increased by 1% to $2.35 billion, with system sales also growing by 1%. The company opened 312 new stores, reaching a total of 10,150 stores. Operating Profit increased significantly to $556 million, and Adjusted Operating Profit rose to $320 million.
Total revenues increased 1% year over year to $2.35 billion.
Opened 312 new stores during the quarter, reaching 10,150 stores in total.
Operating Profit increased 86% year over year to $556 million.
Adjusted Operating Profit increased 7% year over year to $320 million.
Yum China
Yum China
Yum China Revenue by Segment
Forward Guidance
Yum China expects to open more than 900 gross new stores in 2020 and anticipates that the COVID-19 outbreak will continue to have a material adverse impact on its operational and financial results in 2020.
Positive Outlook
- To open more than 900 new stores (gross), an increase compared to the previous target of 800 to 850, primarily due to the acceleration of KFC store expansion, and the inclusion of Huang Ji Huang new builds
- The company believes that it is well-positioned to capture future growth opportunities through its resilient business model, strong capabilities and dedicated team.
- Sales were pressured by reduced travel, a shortened school holiday and some regional outbreaks, but our compelling value proposition and effective digital initiatives drove a sales recovery.
- We expanded restaurant margin by realigning our cost structure and improving productivity.
- We remain committed to driving sustainable growth and creating long-term value to our shareholders.
Challenges Ahead
- The COVID-19 outbreak will continue to have a material adverse impact on its operational and financial results in 2020.
- Future operations, as well as the Company’s cash flows and financial position, may be materially and adversely influenced by further developments related to this global outbreak, including potential additional announcements and actions from governments and local authorities, disruption in our supply chain, our inability to provide safety measures to protect our employees, or other reasons.
- Although the COVID-19 outbreak in China has improved over the past months, we are not out of the woods yet.
- The lingering effect remains unpredictable.
- Labor productivity improvement was partially due to the shortage in part-time workers. We intend to increase staffing levels in coming months to balance service and efficiency.
Revenue & Expenses
Visualization of income flow from segment revenue to net income