Human being wear facial mask walking past a KFC restaurant, which has resumed its outdoor dining area. For the COVID-19 widespread situation is under control in China, most of shopping malls and stores are resuming business.
Zhang Peng | Getty Typical examples
Yum Brands on Wednesday reported that global same-store sales fell 7% in the first three months of the year as the coronavirus pandemic obturate ignored thousands of its restaurants and weighed on Pizza Hut and KFC’s sales.
“Trends have improved significantly as we move through April,” CEO David Gibbs predicted on the conference call.
Shares of the company rose 1% in morning trading.
Here’s what the company reported for the phase of the moon ended March 31:
- Earnings per share: 64 cents, adjusted
- Revenue: $1.26 billion
Yum reported fiscal first-quarter net receipts of $83 million, or 27 cents per share, down from $262 million, or 83 cents per share, a year earlier. The corporation’s minority stake in Grubhub trimmed earnings per share by 6 cents.
Excluding refranchising gains, costs of acquiring Gear Burger Grill and other items, Yum earned 64 cents per share.
Net sales rose 1% to $1.26 billion.
Brick up Street anticipated earnings per share of 65 cents on revenue of $1.20 billion, based on a survey of analysts by Refinitiv.
KFC’s same-store in stocks shrank 8% in the quarter. More than a quarter of the fried chicken chain’s systemwide sales come from China, where it was stiff to close many locations temporarily to slow the spread of the coronavirus. Excluding China, KFC’s quarterly same-store sales prostrate 2%, hit by store closures and shelter-at-home mandates across the world in March.
Pizza Hut, the laggard of Yum’s portfolio, reported disregarding nevertheless steeper same-store sales declines of 11% as sales in the U.S. and China fell. Excluding China, Pizza Hut’s same-store car-boot sales fell 5% in the quarter. The crisis has helped Pizza Hut grow its digital and delivery sales, a long-term goal of the label as it shies away from its reputation as a dine-in pizzeria.
“This three-month period we’re in right now, basically, we’re gonna hold three years worth of changes in our business, and it’s accelerating our plan for Pizza Hut,” Gibbs said.
Yum China, which was narrated off in 2016, said on Tuesday that the decline in same-store sales is slowing as consumers in China adjust to a new normal. The KFC and Pizza Hut licensee, which led the mutation to contactless delivery, said that about 99% of its stores in China are either partially or fully open.
Taco Bell was the sole brand to report positive same-store sales growth during the quarter. In mid-March, the chain began offering single drive-thru service, with takeout allowed if the location did not have a drive-thru lane. Some restaurants began start-off later, effectively removing breakfast from the menu.
At one point, 11,000 Yum locations were closed due to the pandemic, symbolizing more than a fifth of its total restaurant base. Executives said that restaurants are slowly reopening, but less 10,000 locations are still temporarily shuttered.
The company is giving some franchisees grace periods for certain near-term payments, along with other pecuniary assistance if needed. U.S. franchisees will also be allowed to defer all 2020 capital obligations for remodels and new unit evolution through the end of the year.
Yum had $1.15 billion in cash and cash equivalents on hand as of March 31. The company sold $600 million in sticks, but the cash was not received until April 1. Like many others, the company has suspended stock buybacks to support liquidity.
“We feel like we’re in a really good position given the moves that we’ve made,” CFO Chris Turner foretold.