Yum China Reports Higher Revenue, Same-store Sales; Stock Up After-hours
Yum China Holdings Inc. (NYSE: YUMC), the licensee of KFC, Pizza Hut, and Taco Bell in China, jumped nearly 3 percent in after-hours trading today after the company announced both revenue and same store sales grew 4 percent year-over-year.
The Shanghai-based company, which has 8,653 restaurants in more than 1,300 cities in China, said revenue reached $2.3 billion in the first quarter from $2.2 billion a year ago. The company said it opened 237 stores in the first quarter.
Net income for the period slid 23 percent, however, to $222 million, or 57 cents per fully diluted share, from $288 million, or 72 cents per share. Last year's results included a gain of $98 million from the purchase of Wuxi KFC.
"We are pleased to report a very strong start to 2019 as we delivered a 9% increase in system sales in constant currency in the first quarter, our tenth consecutive quarter of system sales growth since the spin-off," said Joey Wat, CEO of Yum China. "This resilient growth was driven by another robust quarter at KFC, which successfully lapped three strong first quarters between 2016 and 2018, and a very encouraging quarter at Pizza Hut. Pizza Hut delivered positive same-store sales growth and a significant improvement in profitability in the first quarter, while continuing to make strategic investments in value offerings and multiple other initiatives to drive the ongoing revitalization of the brand."
Yum China also announced that its board approved a cash dividend of 12 cents per share on Yum China's common stock, payable as of the close of business on June 17 to shareholders of record as of the close of business on May 28.
The company said that during the first quarter, it purchased about 1.7 million shares of Yum China common stock for $64.7 million at an average price of $37.90 per share.
Yum China closed today at $44.75 per share in New York before the release of earnings. It was trading up $1.25, or nearly 3 percent, in after-hours trading late Monday.
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