Restaurant company Yum! Brands (NYSE:YUM) 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.
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.