Yum China says virus resurgence in China hit Q2 sales

Shares of Yum China Holdings Inc. fell nearly 2% in the extended session Wednesday after the restaurant operator said a resurgence of COVID-19 cases in some areas of China hobbled its second-quarter results. Yum, which operates KFC, Pizza Hut and other brands in China said that more than 99% of its stores in the country are open, but sales and profits are trending "unevenly." Moreover, sales improved in April and May but softened again in June. "Sales were primarily impacted by significantly reduced traffic at transportation and tourist locations, delayed and shortened school holidays and resurging regional infections," Yum China said. Yum China said it earned $132 million, or 34 cents a share, in the quarter, compared with $178 million, or 46 cents a share, in the prior-year quarter. Adjusted for one-time items, Yum China earned $136 million, or 35 cents a share, compared with 46 cents a share a year ago. Sales fell 11% to $1.90 billion, from $2.12 billion a year ago. Same-store sales fell 11%, including a decline of 10% at KFC and 12% at Pizza Hut. Analysts polled by FactSet expected the company to report an adjusted profit of 24 cents a share on sales of $1.96 billion.

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