Yum China restaurant sales flat in fourth quarter

Yum China restaurant sales flat in fourth quarter
Logos of KFC, owned by Yum Brands Inc, are seen on its delivery bicycles in front of its restaurant in Beijing February 25, 2013.
PHOTO: Reuters

Yum China Holdings Inc , reporting for the first time as a standalone company, on Tuesday said its profit beat expectations for the fourth quarter despite just missing Wall Street’s target for sales at established restaurants.

Shares in the company, which is China’s largest publicly held restaurant operator with 7,562 units, were up 1 percent at US$28.40 in thin after-hours trading.

Same-store sales were flat after a 3 percent increase at KFC shops were offset by a 7 percent drop at Pizza Hut Casual Dining. Analysts polled by Consensus Metrix expected a 0.1 percent uptick in same-store sales.

Rivals McDonald’s Corp and Starbucks Corp reported same-store sales gains of 7.9 percent and 6 percent, respectively, from China for the latest quarter.

Yum China’s fourth-quarter net income was $88 million (S$125 million) , or 23 cents per share, on revenue of $1.98 billion. Profit excluding special items was 17 cents per share.

Analysts had expected a profit of 8 cents per share on revenue of $2.05 billion, according to Thomson Reuters I/B/E/S.

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Chief Executive Officer Micky Pant said on a conference call with analysts that he was “cautiously optimistic” about the company’s business amid rising costs for labor and commodities, stiff competition and simmering protectionist sentiments.

Yum China started trading as a standalone company on Nov. 1. Prior to the separation, it had been the primary profit and sales driver for Yum Brands Inc.

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