NYSE$YUMC

Yum China Holdings Inc · Q4 2020 earnings

Q4 2020 earnings · · Investor relations

Briefing

Yum China's Q4 2020 results showed revenue growth and improved profitability despite ongoing COVID-19 challenges.

Yum China reported an 11% increase in total revenues and a 90% increase in operating profit for the fourth quarter of 2020. The company opened 505 new stores during the quarter and managed to improve restaurant margins despite same-store sales decline. While the recovery was uneven due to regional COVID-19 outbreaks, the company's digital capabilities and value campaigns helped drive traffic and improve overall performance.

  • Total revenues increased by 11% year-over-year to $2.26 billion.
  • Operating Profit surged by 90% year-over-year to $180 million.
  • Same-store sales declined by 4% year-over-year.
  • Opened 505 new stores in the fourth quarter, contributing to a total of 1,165 new stores opened in 2020.

Headline financials

Total Revenue

$2.26B

Previous: $2.03B+11.3%
EPS (adj)

$0.35

Previous: $0.25+40.0%
Restaurant margin

15.1%

Previous: 12.4%+21.8%
Capital Expenditures

$135M

Previous: $125M+8.0%
Free Cash Flow

$80M

Previous: $15M+433.3%
Net Income

$151M

Previous: $90M+67.8%
Operating Income

$180M

Previous: $94M+91.5%
Gross Profit

$361M

Previous: $268M+34.7%
Cash & Equivalents

$1.16B

Previous: $1.05B+10.7%
Total Assets

$10.9B

Previous: $6.95B+56.5%
Stock-Based Comp

$9M

Previous: $5M+80.0%

Revenue & EPS history

Yum China · Revenue · Quarterly

$2.26B

Q4 2020+11.3%vs Q4 2019
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Yum China · $2.07B total across 2 segments · Q4 2020

  • KFC
    $1.6B+14.9%
  • Pizza Hut
    $471M+2.6%

Forward guidance

Yum China anticipates significant headwinds in the first quarter of 2021 due to regional COVID-19 outbreaks and tightened public health measures. Despite these challenges, the company remains committed to growth and intends to open approximately 1,000 new stores in the year ahead and make capital expenditures of approximately $600 million.

Tailwinds

  • Continue to manage the impact of the pandemic.
  • Swiftly adjust operations according to market conditions.
  • Drive traffic with compelling offers for both dine-in and off-premise occasions.
  • Leverage industry-leading digital capabilities.
  • Remain committed to growth and intend to open approximately 1,000 new stores in the year ahead.

Headwinds

  • Significant headwinds in the first quarter.
  • Traffic is significantly lower in transportation and tourist locations.
  • Chinese New Year holiday season will be subdued.
  • Sales impacted by substantially less travel, smaller gatherings and generally reduced social activities.
  • Tightened public health measures across China.

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 Q4 2020

Historical avgQ4 2020

+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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