It’s good to be Yum China: Q2 operating profit up 64%
Yum China continues to be embraced with open arms in China, reporting a 3 percent spike in Q2 same-store sales and mobile payments exceeding 40 percent of total company sales during that period, a news release said. The company reported that its operating profit grew 64 percent, thanks to its loyal customers. who surpassed the 100 million milestone in loyalty program membership.
“I am pleased with our overall performance during the quarter, with … system sales up 7 percent, on the back of continued strength at KFC. Operating profit, restaurant margin and net income all showed robust improvement.” CEO Micky Pant said in a news release.
“We are committed to building one of the world’s leading restaurant companies, and are executing against a plan that we have developed towards this goal. We are making progress in the key themes we are investing in: Loyalty programs, digital and delivery capabilities, and continued upgrade of restaurant assets and optimization of store formats.”
Other key Q2 results include:
- KFC system sales growth of 8 percent, and same-store sales growth of 3 percent.
- Pizza Hut* system sales growth of 7 percent and flat same-store sales growth.
- 90 new restaurant openings.
- Total restaurant margin increased 2.7 percentage points to 15.3 percent.
- Operating profit increased 64 percent.
- Net income increased 39 percent to $107 million.
- Adjusted EBITDA increased 15 percent to $259 million.
- Basic EPS increased 33 increased to $0.28 and diluted EPS increased 29 percent to $0.27.
*Beginning with the quarter ended May 31, 2017, Pizza Hut Casual Dining and Pizza Hut Home Service were combined and reported together as the Pizza Hut reportable segment. Segment financial information for prior periods has been re-cast to align with this change in segments.
“We also completed the acquisition of an 80 percent stake, on a fully diluted basis, in Daojia, an online aggregator platform with two brands focusing on higher-end delivery market segment, for a cash consideration of $36.7 million to the selling shareholders and a capital contribution of $25 million to Daojia,” Pant said. “We see this acquisition as complementary to our existing delivery business, and it provides valuable operational and technological expertise.”
Pant said more than 4,900 restaurants offered delivery and delivery sales made up 13 percent of Q2 company sales.
Photo: Depositphotos.com
