Please ensure Javascript is enabled for purposes of website accessibility

Yum! Brands Expects Q1 Losses, Even Stronger Declines Through June

By Rhian Hunt - Mar 24, 2020 at 6:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The spread of coronavirus continues to drive diners away from restaurants worldwide.

Restaurant company Yum! Brands (YUM -0.05%) announced today in an SEC filing that it expects moderate sales losses in the quarter ended March 31 and an even bigger plunge in the second quarter. Owner of major global brands such as Pizza Hut, Taco Bell, KFC, and The Habit Burger Grill, the company is experiencing the effects of coronavirus-related social distancing and temporary closures around the planet.

The interior of a Pizza Hut restaurant.

Image source: Pizza Hut.

While Pizza Hut delivery orders are shooting higher because people are ordering from home, dine-in ordering has taken a major blow from COVID-19. Yum! also pointed out that dine-in sales may be showing signs of recovery in the markets affected first, such as China, where some reports indicate evidence of a rebound in economic activity.

However, Yum! additionally noted that these recoveries are very new and could taper off if a new outbreak occurs. The current report estimates a mid- to high-single-digit slump in same-store sales during the year's first quarter. It also says Yum! predicts an even larger drop in same-store purchases during the second quarter, which ends on June 30, since the virus seems to be spreading to more of the company's markets, indicating even bigger upcoming declines in traffic worldwide.

The report also announces the indefinite suspension of the company's $2 billion share buyback program, as Yum! seeks to keep as much cash on hand as possible for operational flexibility during the pandemic.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Yum! Brands, Inc. Stock Quote
Yum! Brands, Inc.
$113.42 (-0.05%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.