Yum China: 30% of Stores Closed Amid Coronavirus Outbreak

By Micah Maidenberg

Yum China Holdings Inc. (YUMC) warned the spread of the coronavirus in China will likely hurt its performance this year.

The company said Wednesday it has temporarily closed more than 30% of its stores. The fast-food chain controls KFC, Taco Bell, Pizza Hut and other restaurant brands in China.

For stores that remain open, same-store sales since the Lunar New Year holiday fell as much as 50% compared with the same time last year in part because of shortened operating hours and reduced traffic.

Yum China said it isn't able to forecast yet when closed stores will reopen and when traffic levels will pick back up.

"The coronavirus outbreak is a major public health situation in China. Our top priority is the health and safety of our employees and customers," Chief Executive Joe Wat said in a statement.

Yum China said total revenues increased to $2.03 billion in the fourth quarter, a 6% gain compared with the year earlier and in line with expectations from analysts polled by FactSet.

Same-store sales rose 2% versus the fourth quarter of 2018.

The company reported a profit of $98 million, or 23 cents a share, for the quarter, up from $46 million, or 19 cents a share, the year earlier. Its adjusted profit of 25 cents a share was eight cents more than the consensus estimate.

This year, Yum China expects to open between 800 and 850 new stores on a gross basis and predicts between $500 million and $550 million in capital spending.

Write to Micah Maidenberg at [e-mail]

(END) Dow Jones Newswires

February 05, 2020 17:00 ET (22:00 GMT)

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