Published on 4 May 2022 on Zacks via Yahoo Finance

Yum China (YUMC) Q1 Earnings Miss Estimates, Revenues Top

Yum China Holdings, Inc. YUMC reported first-quarter 2022 results, wherein earnings missed the Zacks Consensus Estimate, but revenues beat the same. While the top line increased from the prior-year quarter's levels, the bottom line declined on a year-over-year basis.During the quarter under discussion, the company's operations were affected by the Omicron variant. The company noted that the Omicron variant continues to have a severe impact in the second quarter. Economically important regions like Shanghai, Tianjin, Jilin, Suzhou, Shenzhen and Guangzhou have been severely impacted by the Omicron variant.

Earnings & Revenue Discussion

During first-quarter 2022, the company reported adjusted diluted earnings of 24 cents. The figure lagged the Zacks Consensus Estimate of 29 cents. The bottom line declined 56% from 54 cents reported in the year-ago quarter.Quarterly revenues of $2,668 million surpassed the consensus mark of $2,609 million. The top line improved 4% on a year-over-year basis. Excluding foreign currency translation, the top line rose 2% year over year.Total system sales in the reported quarter decreased 4% year over year. System sales at KFC and Pizza Hut declined by 4% and 1%, respectively. Meanwhile, same-store sales dropped 8% year over year, primarily due to a decline of 9% at KFC and 5% at Pizza Hut. In March, same-store sales fell by more than 20% year over year. The dismal performance continued in April (preliminary) as same-store sales decreased more than 20% year over year.