Please ensure Javascript is enabled for purposes of website accessibility

Yum China Holdings Misses on Q1 Revenue, Earnings

By Eric Volkman - Apr 29, 2020 at 9:28AM

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

Ravaged by the coronavirus, the restaurant chain operator posted significant declines in its headline financials.

Yum China Holdings (YUMC -0.41%) released its fiscal 2020 first-quarter results after market close on Tuesday, revealing notable declines in its business due to the SARS-CoV-2 coronavirus outbreak.

The quarter saw the company reap the equivalent of $1.75 billion in revenue. Non-GAAP (adjusted) net income was $63 million, or $0.16 per share.

Those figures represented steep year-over-year declines, as the coronavirus brought the Chinese economy to a near-halt. Revenue was down 24% on the back of a same-store sales figure that fell 15%. Adjusted net profit saw a far more precipitous drop at 68%.

Flag of the People's Republic of China.

Image source: Getty Images.

The headline numbers did not meet analyst expectations. On average, those prognosticators were modeling $1.87 billion in revenue and $0.17 for per-share net profit. It should be noted, though, that relatively few analysts track the stock, so profitability estimates in particular can vary widely.

With the severe outbreak of the coronavirus, Yum China had to close some restaurants and scale down operations at others, offering takeout and delivery services without the option to dine in. On the financial side, the company has temporarily suspended share repurchases. It also will not pay a dividend in either of the two upcoming quarters.

Although it did not provide specific revenue or profitability guidance, Yum China did say that "[t]he situation in China is gradually stabilizing, but we remain cautious as our restaurant traffic is still below pre-outbreak levels. We expect an extended recovery period, and that the pace will be uneven across regions, dayparts and segments."

On Tuesday, before the results were published, Yum China shares essentially traded flat while the major equity indexes and fellow consumer goods stocks generally slumped on the day.

 

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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 China Holdings, Inc. Stock Quote
Yum China Holdings, Inc.
YUMC
$48.07 (-0.41%) $0.20

*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
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

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.