NYSE$YUMC

Yum China Holdings Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Yum China's financial performance was impacted by COVID-19 outbreaks and policy changes, but the company adapted by focusing on off-premise demand, cost management, and operational efficiencies.

Yum China's Q4 2022 revenues decreased by 9% year-over-year to $2.09 billion. Operating profit decreased 94% year-over-year to $41 million, and net income decreased 89% to $53 million. Despite challenges, the company opened 538 net new stores and improved restaurant margin to 10.4%.

  • Total revenues decreased 9% year over year to $2.09 billion.
  • Operating Profit decreased 94% year over year to $41 million.
  • Net Income decreased 89% to $53 million.
  • Opened 538 net new stores during the quarter.

Headline financials

Total Revenue

$2.09B

Previous: $2.29B-8.9%
EPS (adj)

$0.13

Previous: $0.03+333.3%
Same-store sales growth

-4.0%

No prior period
Restaurant margin

10.4%

Previous: 7.5%+38.7%
Capital Expenditures

$170M

Previous: $207M-17.9%
Free Cash Flow

-$86M

Previous: -$150M+42.7%
Net Income

$53M

Previous: $475M-88.8%
Operating Income

$41M

Previous: $633M-93.5%
Gross Profit

$244M

Previous: $206M+18.4%
Cash & Equivalents

$1.13B

Previous: $1.14B-0.5%
Total Assets

$11.8B

Previous: $13.2B-10.6%
Stock-Based Comp

$11M

Previous: $9M+22.2%

Revenue & EPS history

Yum China · Revenue · Quarterly

$2.09B

Q4 2022-8.9%vs Q4 2021
Beat estimate in 9 of 15 quarters(60%)
ActualEstimate

Revenue by segment

Yum China · $2B total across 2 segments · Q4 2022

  • KFC
    $1.59B-2.8%
  • Pizza Hut
    $404M-15.7%

Forward guidance

The Company currently expects to open approximately 1,100 to 1,300 net new stores and make capital expenditures in the range of approximately $700 million to $900 million.

Tailwinds

  • Positive momentum in the Chinese New Year holiday.
  • Careful planning of restaurant staffing and rider resources to ensure operational excellence.
  • Anti-fragile operations to help shine, in good times and bad.
  • Continue to build Yum China into an even more resilient, profitable and growing company.
  • Priority this year is to drive sales.

Headwinds

  • The real test will be the sales trajectory after the holiday and how the economy will rebound, given the fluid COVID conditions and macroeconomic headwinds.
  • Must stay agile and plan for a range of scenarios.
  • Consumers tend to be more careful with spending after holidays.
  • Experiences in other countries also suggest further outbreaks following relaxation of COVID restrictions and emergence of different COVID variants are real possibilities.
  • A portion of the population may remain cautious about going out in public, while macroeconomic factors such as an inflationary environment and softening global economic conditions may weigh on consumer spending.

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 2022

Historical avgQ4 2022

+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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