NYSE$YUMC

Yum China Holdings Inc · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Results were impacted by the Delta variant outbreak, but the company demonstrated resiliency and agility.

Yum China's third-quarter results were significantly impacted by the Delta variant outbreak, which led to decreased same-store sales. Despite these challenges, the company sustained system sales growth through new store openings and digital channels. Total revenues increased 9% year over year to $2.55 billion.

  • Total revenues increased 9% year over year to $2.55 billion.
  • Opened a record of 524 new stores during the quarter.
  • Total system sales increased 1% year over year, excluding F/X.
  • Same-store sales decreased 7% year over year, excluding F/X.

Headline financials

Total Revenue

$2.55B

Previous: $2.35B+8.8%
EPS (adj)

$0.22

Previous: $0.66-66.7%
Same-store sales growth

-7.0%

No prior period
Restaurant margin

12.2%

Previous: 18.6%-34.4%
Capital Expenditures

-$482M

Previous: -$284M-69.7%
Free Cash Flow

-$378M

Previous: $155M-343.9%
Net Income

$104M

Previous: $439M-76.3%
Operating Income

$178M

Previous: $556M-68.0%
Gross Profit

$2.55B

Previous: $2.35B+8.8%
Cash & Equivalents

$1.28B

Previous: $1.78B-28.3%
Total Assets

$11.5B

Previous: $10.4B+10.8%
Stock-Based Comp

$7M

Previous: $10M-30.0%

Revenue & EPS history

Yum China · Revenue · Quarterly

$2.55B

Q3 2021+8.8%vs Q3 2020
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Yum China · $2.35B total across 2 segments · Q3 2021

  • KFC
    $1.8B+9.4%
  • Pizza Hut
    $551M+7.8%

Forward guidance

The Company expects the near-term environment to be challenging, with COVID-19 continuing to affect consumer behavior and impact same-store sales recovery. Restaurant margins in the fourth quarter are expected to be pressured by sales deleveraging, rising commodity prices, and wage inflation.

Tailwinds

  • Continue to manage costs and stay agile.
  • Continue to invest with discipline in store network expansion.
  • Continue to invest with discipline in supply chain.
  • Continue to invest with discipline in digitalization for sustainable growth.
  • Increasing gross new stores target to over 1,700.

Headwinds

  • COVID-19, especially the Delta variant outbreaks, will continue to affect consumer behavior and impact our same-store sales recovery.
  • Fourth quarter is the seasonally lowest quarter for sales and profit margins.
  • Restaurant margins in the fourth quarter and near-term to be pressured by sales deleveraging impact.
  • Restaurant margins in the fourth quarter and near-term to be pressured by rising commodity prices.
  • Restaurant margins in the fourth quarter and near-term to be pressured by wage inflation.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2021

Historical avgQ3 2021

+1.5%

Avg return

Earnings day

+2.5%

Avg return

5 days after

+3.0%

Avg return

30 days after

71%

32 / 45 earnings

Positive

+15.6%

Q3 2018

Best reaction

-16.1%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.9%+1.0%-10.4%
Q4 2025+1.8%+13.3%+2.1%
Q3 2025+2.0%-0.9%+6.0%
Q1 2025-7.2%-6.8%-6.5%
Q4 2024+9.1%+4.3%+9.2%
Q3 2024+7.3%+9.4%+4.5%
Q2 2024+13.0%+14.0%+14.0%
Q1 2024-7.9%-3.1%-12.1%
Q4 2023+12.4%+12.2%+14.4%
Q3 2023-16.1%-14.6%-18.7%
Q2 2023-4.0%-6.3%-9.9%
Q1 2023+0.8%+0.8%-8.0%
Q4 2022+2.7%+4.6%-1.4%
Q3 2022+12.0%+20.8%+32.5%
Q2 2022+4.8%+3.3%+6.4%
Q1 2022+1.8%-3.8%+7.1%
Q4 2021+2.7%+11.1%-3.7%
Q3 2021-2.4%-1.9%-13.9%
Q2 2021+1.9%+1.0%-1.5%
Q1 2021+5.8%+5.0%+11.9%
Q4 2020-4.3%+2.0%+3.3%
Q3 2020+0.4%-2.5%+8.2%
Q2 2020-3.5%-0.7%+7.4%
Q1 2020+8.7%+1.0%-3.4%
Q4 2019-1.3%-4.3%-3.9%
Q3 2019+1.2%-4.8%+1.4%
Q2 2019+0.2%-0.6%-0.2%
Q1 2019+5.6%+5.2%-13.9%
Q4 2018+9.6%+12.9%+15.4%
Q3 2018+15.6%+15.4%+14.7%
Q2 2018-2.2%-4.6%+7.2%
Q1 2018-13.5%-10.7%-8.1%
Q4 2017-6.6%-9.3%-5.6%
Q3 2017+2.3%+6.6%+4.8%
Q2 2017-13.2%-7.3%-7.8%
Q1 2016+1.9%+6.1%+10.0%
Q1 2017+10.0%+12.1%+21.0%
Q1 2015+0.7%+1.8%+19.8%
Q2 2015+0.7%+1.8%+19.8%
Q4 2014+0.7%+1.8%+19.8%
Q2 2016+0.7%+1.8%+19.8%
Q4 2016-5.8%-7.7%-9.0%
Q3 2015+4.9%+11.3%-2.8%
Q4 2015+4.9%+11.3%-2.8%
Q3 2016+4.9%+11.3%-2.8%

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