Yum China, the country’s largest restaurant chain, warned today that disruptions in connection with Covid-19 will take a bite out of profit and sales in the third quarter.
Adjusted operating profit, which excludes special items, may fall “approximately 50% to 60%” compared with the same period of last year, Yum China said in a Hong Kong Stock Exchange filing today. The company operates KFC, Pizza Hut and other restaurants in the country.
Yum China’s shares fell by 4.4% in late Hong Kong trading to HK$456.60 after the announcement. The stock also trades in New York.
“At the peak of the outbreak in 2021, more than 500 of our stores in 17 provinces were closed or offered only takeaway and delivery services,” Yum China said. “Same-store sales in August 2021 declined by (a) mid-teens percentage year over year, or close to an approximately 20% decline compared to August 2019.” Click here for the full statement.
China said today retail sales in August grew by a lower than expected 2.5% from a year earlier, as Covid-19 lockdowns hurt consumer sentiment.
Underscoring the continuing impact of the pandemic in the world’s second-largest economy, China airline passenger travel in August fell by 51% from a year earlier, the government reported yesterday. (See post here.)
Goldman last month lowered its forecast of China third-quarter GDP growth to 2.3% year on year from 5.8% on concerns about Covid-19 fallout.
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