SHANGHAI, March 14, 2022 /PRNewswire/ -- Yum China
Holdings, Inc. (the "Company" or "Yum
China") (NYSE: YUMC and HKEX: 9987) today updated its first
quarter 2022 business performance in light of the recent COVID-19
development in China.
As we mentioned in the fourth quarter earnings release,
same-store sales in January 2022
improved modestly from the fourth quarter, but were still down year
over year, compared to the comparable Chinese New Year Holiday
period in 2021. Entering March, the situation has rapidly
deteriorated with the highly transmissible Omicron
variant causing outbreaks across China, including economically
important regions of Guangdong,
Shanghai, Shandong and Jilin. Daily cases have hit a two-year high.
Quarter-to-date case counts for 2022 have surpassed that of full
year 2021. Stricter preventive health measures and containment
measures have been observed nationwide, including multiple rounds
of city-wide testing and partial or complete city lockdowns.
Our operations are significantly impacted by the latest
outbreaks and the tighter public health measures which resulted in
a further reduction of social
activities, travelling and consumption. Although the situation is
still rapidly developing, we are providing the following first
quarter 2022 update based on latest trends:
- Same-store sales
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- Decreased approximately 4% year over year for the two months
combined in January and February.
- Decreased approximately 20% year over year for the first two
weeks of March and is still trending down in recent days.
- Operating profit
-
- Declined approximately 20% year over year for the two months
combined in January and February, primarily due to the significant
sales deleveraging and cost inflation.
- Based on the latest trend, we currently estimate that Operating
profit for the first quarter to be in the range of $165 to $200
million.
- Stores temporarily closed or offered only takeaway and
delivery services
-
- Over 500 stores at the peak in January 2022.
- Over 1,100 stores as of March 13,
2022.
- Total store count reached 12,163 as of February 28, 2022, with 375 net new store
openings for the two months combined in January and
February.
Joey Wat, CEO of Yum China, commented, "As the country battles
the surge in COVID-19 cases, we are staying vigilant to ensure the
health and safety of our employees and customers. We will keep our
restaurants open and provide food services to customers wherever it
is possible and safe to do so. Our robust supply chain management
has shielded us from material business disruptions. We will
continue to drive sales especially in delivery and takeaway
occasions. We will also manage costs diligently, and adjust our
operations as well as promotion offers as the situation evolves.
With our resilient business models, operational excellence and
leading digital and delivery capabilities, we are confident we will
overcome this challenging and volatile situation. We will continue
to execute our RGM strategic framework to fortify
resilience, accelerate growth and widen our strategic
moat. We believe that this combination of efforts will
enable us to drive long-term growth and generate substantial
shareholder value in the years ahead."
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. We intend all
forward-looking statements to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally can be identified by the fact
that they do not relate strictly to historical or current facts and
by the use of forward-looking words such as "expect,"
"expectation," "believe," "anticipate," "may," "could," "intend,"
"belief," "plan," "estimate," "target," "predict," "project,"
"likely," "will," "continue," "should," "forecast," "outlook" or
similar terminology. These statements are based on current
estimates and assumptions made by us in light of our experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors that we believe are
appropriate and reasonable under the circumstances, but there can
be no assurance that such estimates and assumptions will prove to
be correct. Forward-looking statements include, without limitation,
statements regarding the future strategies, growth, business plans,
investment, dividend and share repurchase plans, earnings,
performance and returns of Yum
China, anticipated effects of population and macroeconomic
trends, the expected impact of the COVID-19 pandemic, the
anticipated effects of our innovation, digital and delivery
capabilities and investments on growth and beliefs regarding the
long-term drivers of Yum China's
business. Forward-looking statements are not guarantees of
performance and are inherently subject to known and unknown risks
and uncertainties that are difficult to predict and could cause our
actual results or events to differ materially from those indicated
by those statements. We cannot assure you that any of our
expectations, estimates or assumptions will be achieved. The
forward-looking statements included in this press release are only
made as of the date of this press release, and we disclaim any
obligation to publicly update any forward-looking statement to
reflect subsequent events or circumstances, except as required by
law. Numerous factors could cause our actual results or events to
differ materially from those expressed or implied by
forward-looking statements, including, without limitation: whether
we are able to achieve development goals at the times and in the
amounts currently anticipated, if at all, the success of our
marketing campaigns and product innovation, our ability to maintain
food safety and quality control systems, changes in public health
conditions, including the COVID-19 pandemic and regional outbreaks
caused by existing or new COVID-19 variants, our ability to control
costs and expenses, including tax costs, as well as changes in
political, economic and regulatory conditions in China. In addition, other risks and
uncertainties not presently known to us or that we currently
believe to be immaterial could affect the accuracy of any such
forward-looking statements. All forward-looking statements should
be evaluated with the understanding of their inherent uncertainty.
You should consult our filings with the Securities and Exchange
Commission (including the information set forth under the captions
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Annual Report
on Form 10-K) for additional detail about factors that could affect
our financial and other results.
About Yum China Holdings, Inc.
Yum China Holdings, Inc. is a licensee of Yum! Brands in
mainland China. It has exclusive rights in mainland China to KFC,
China's leading quick-service restaurant brand, Pizza Hut, the
leading casual dining restaurant brand in China, and Taco Bell, a California-based restaurant chain serving
innovative Mexican-inspired food. Yum
China also owns the Little Sheep, Huang Ji Huang, East Dawning and COFFii &
JOY concepts outright. In addition, Yum
China has partnered with Lavazza to explore and develop the
Lavazza coffee shop concept in China. The Company
had 11,788 restaurants in over 1,600 cities at the
end of December 2021.
In 2021, Yum China ranked # 363 on the Fortune 500 list and
was named to TIME100 Most Influential Companies list. Yum China has also been selected as member of
both Dow Jones Sustainability Indices (DJSI): World Index and
Emerging Market Index. In 2022, the Company was named to the
Bloomberg Gender-Equality Index and was certified as a Top Employer
2022 in China by the Top Employers
Institute, both for the fourth consecutive year. For more
information, please visit http://ir.yumchina.com.
Investor Relations
Contact:
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Tel: +86 21 2407 7556
/+852 2267 5801
IR@YumChina.com
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Media
Contact:
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Tel: +86 21 2407
7510
Media@YumChina.com
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SOURCE Yum China Holdings, Inc.