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Dec 31, 2022
Yum China Q4 2022 Earnings Report
Yum China's financial performance was impacted by COVID-19 outbreaks and policy changes, but the company adapted by focusing on off-premise demand, cost management, and operational efficiencies.
Key Takeaways
Yum China's Q4 2022 revenues decreased by 9% year-over-year to $2.09 billion. Operating profit decreased 94% year-over-year to $41 million, and net income decreased 89% to $53 million. Despite challenges, the company opened 538 net new stores and improved restaurant margin to 10.4%.
Total revenues decreased 9% year over year to $2.09 billion.
Operating Profit decreased 94% year over year to $41 million.
Net Income decreased 89% to $53 million.
Opened 538 net new stores during the quarter.
Yum China
Yum China
Yum China Revenue by Segment
Forward Guidance
The Company currently expects to open approximately 1,100 to 1,300 net new stores and make capital expenditures in the range of approximately $700 million to $900 million.
Positive Outlook
- Positive momentum in the Chinese New Year holiday.
- Careful planning of restaurant staffing and rider resources to ensure operational excellence.
- Anti-fragile operations to help shine, in good times and bad.
- Continue to build Yum China into an even more resilient, profitable and growing company.
- Priority this year is to drive sales.
Challenges Ahead
- The real test will be the sales trajectory after the holiday and how the economy will rebound, given the fluid COVID conditions and macroeconomic headwinds.
- Must stay agile and plan for a range of scenarios.
- Consumers tend to be more careful with spending after holidays.
- Experiences in other countries also suggest further outbreaks following relaxation of COVID restrictions and emergence of different COVID variants are real possibilities.
- A portion of the population may remain cautious about going out in public, while macroeconomic factors such as an inflationary environment and softening global economic conditions may weigh on consumer spending.
Revenue & Expenses
Visualization of income flow from segment revenue to net income