Yum China Holdings,
Yum China Holdings, Inc. YUMC reported second-quarter 2021 outcomes, whereby each earnings and revenues missed the Zacks Consensus Estimate. Nonetheless, each the metrics improved 12 months over 12 months. The highest and backside strains missed the respective consensus mark after beating the identical within the trailing six quarters.
Earnings & Income Dialogue
In the course of the second quarter, the corporate reported adjusted diluted earnings of 42 cents that missed the Zacks Consensus Estimate of 43 cents by 2.3%. The reported determine elevated 20% from the year-ago quarter.
Revenues of $2,451 million lagged the consensus mark of $2,490 million however improved 29% on a year-over-year foundation. Excluding overseas foreign money translation, the highest line elevated 17% 12 months over 12 months.
Complete system gross sales within the reported quarter rose 14% 12 months over 12 months. System gross sales at KFC moved up 14%, whereas the identical at Pizza Hut elevated 16%.
In the meantime, same-store gross sales climbed 5% 12 months over 12 months, primarily owing to a rise of 4% at KFC and 11% at Pizza Hut.
Yum China Holdings Inc. Worth, Consensus and EPS Shock 
Yum China Holdings Inc. price-consensus-eps-surprise-chart | Yum China Holdings Inc. Quote
Working Highlights
Within the second quarter, whole prices and bills expanded 25% 12 months over 12 months to $2,218 million in contrast with $1,774 million within the year-ago quarter. The upsurge can primarily be attributed to a 23% rise in meals and paper prices, a 41% enhance in payroll and worker advantages and a 25% surge in occupancy and different working bills.
Restaurant margin within the quarter underneath overview was 15.8%, up 210 foundation factors from the year-ago quarter’s ranges.
In the course of the quarter, adjusted working revenue totaled $237 million, up 79.5% from the year-ago quarter. Adjusted internet earnings amounted to $185 million in contrast with $136 million within the prior-year quarter.
Steadiness Sheet
Money and money equivalents as of Jun 30, 2021, totaled $1,209 million in contrast with $1,158 million as on Dec 31, 2020. Inventories within the second quarter had been $380 million in contrast with $398 million at 2020-end.
The corporate’s board of administrators introduced a dividend of 12 cents per frequent share. The dividend is payable on Sep 16, 2021, to shareholders of file on the shut of enterprise as of Aug 25.
Unit Growth and Different Updates
Within the second quarter, Yum China opened 404 new eating places. Within the first-half of 2021, the corporate had opened 719 gross new shops. In the course of the quarter underneath overview, the corporate’s supply contributed almost 30% of KFC and Pizza Hut’s firm gross sales, up almost one proportion level from the prior-year quarter.
Digital orders in the course of the second quarter accounted for 85% of KFC and Pizza Hut’s firm gross sales in contrast with 80% within the previous-year quarter. Loyalty applications and member gross sales of KFC and Pizza Hut led to year-over-year progress. The KFC and Pizza Hut loyalty applications elevated to greater than 330 million members.
2021 Outlook
Yum China expects to open roughly 1,300 (gross) new shops in 2021, suggesting a rise from the prior estimate of 1,000 shops. In the meantime, capital expenditures in 2021 are anticipated at $700-800 million in contrast with the prior estimate of $600 million.
Zacks Rank & Key Picks
Yum China at the moment carries a Zacks Rank #4 (Promote).
Some better-ranked shares the identical house embody Restaurant Manufacturers Worldwide Inc. QSR, Yum! Manufacturers, Inc. YUM and The Wendy’s Firm WEN. All these shares carry a Zacks Rank #2 (Purchase). You’ll be able to see the entire listing of at this time’s Zacks #1 Rank (Sturdy Purchase) shares right here.
Restaurant Manufacturers’ earnings in 2021 are anticipated to witness progress of 32%.
Yum! Manufacturers reported better-than-expected earnings within the trailing 4 quarters, with the common shock being 23%.
Wendy’s beat earnings estimates in three of the trailing 4 quarters and missed as soon as, resulting in a median shock of 17.3%.
(We’re reissuing this text to appropriate a mistake. The unique article, issued on July 29, 2021, ought to now not be relied upon.)
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