Yum China Q2 Revenue Drops 11%
Yum China Holdings Inc. announced Wednesday that its revenue declined 11% year over year to $1.9 billion in the second quarter of 2020.
Yum China said its net income fell to $136 million in the second quarter, compared with $178 million a year earlier. These figures are adjusted for non-recurring items.
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The company reported a 4% system sales decline, including declines of 6% at KFC and 12% at Pizza Hut, excluding foreign currency translation. The decline was 7% excluding the consolidation of Huang Ji Huang.
It also saw a 11% same-store sales decline, with a 10% decline at KFC and 12% decline at Pizza Hut, excluding foreign currency translation.
Mainly driven by the growth of KFC restaurants, Yum China said it opened 169 new stores in the past quarter. Now it owns 9,954 stores in total. The company still holds the “800 to 850 new builds this year” goal, excluding Huang Ji Huang.
Most of the company’s stores in China have reopened, Yum China said, but sales and profits are trending “unevenly.” Eastern China has recovered faster while Northern China’s recovery was notably slower. Sales improved in April and May but softened again in June.
“Sales were primarily impacted by significantly reduced traffic at transportation and tourist locations, delayed and shortened school holidays and resurging regional infections,” Yum China said. “These factors and the lingering effect of COVID-19 continue to impact operations in July.”
Yum China shares fell nearly 2% after the company said a resurgence of COVID-19 cases in some areas of China affected its second-quarter results.