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Yum China Reports on Q2 of FY2020

 08/03/2020

In a July 29th press release, Yum China Holdings (YUMC) reported on the second quarter ended June 30th 2020.  According to the consolidated statement of income, the company earned $132 million on sales of $1,902 million with an EPS of $0.35.  For the corresponding second quarter ending June 30th 2019, Yum China Holdings posted net income of $178 million on sales of $2,124 million with an EPS of $0.46. 

 

Same store sales declined 11 percent for the second quarter of 2020 compared with the corresponding quarter in 2019.  KFC declined 10 percent and Pizza Hut 12 percent attributed to COVID-19 restrictions.

 

In commenting on results, Joey Wat, CEO of Yum China holding stated, "I am proud of the results we achieved in Q2.  We continue to operate in a tough environment facing significant headwinds from reduced traffic, particularly at transportation and tourist locations, delayed and shortened school holidays and regional resurgences of COVID-19 infection".  He added "a rapid innovation, our leading digital infrastructure and the membership program supported product launches and value offers that were necessary to drive traffic". 

 

The KFC and Pizza Hut loyalty programs now have 265 million members representing 65 percent of KFC system sales and 53 percent of Pizza Hut system sales.  Digital orders including delivery mobile and kiosk accounted for 86 percent of KFC company sales and 61 percent of Pizza Hut company sales, up respectively 62 percent and 29 percent from the second quarter of fiscal 2019.

 

As of June 30th YUMC operated 6,749 KFC stores, 2,258 Pizza Hut stores and 947 stores under various brands including Taco Bell, Little Sheep and East Dawning (traditional cuisine), and the Coffii and Joy coffee shops.

 

Yum China Holdings has a market capitalization of $19.7 billion and carries total debt of  $1.7 billion. Over the past 52 weeks the Company has traded over a range of $38.33 to $54.68 with a 50-day moving average of $50.95. YUMC trades with a forward P/E of 86.2. The trailing twelve-month operating margin is 7.6 percent and the profit margin is 6.3 percent. The return on assets is 5.6 percent and is 16.7 percent on equity.