Fast (-growing) food

8 February 2018 By Quentin Webb

The mainland operator of KFC grew revenue 8 pct last year and boosted operating profit by 23 pct. Pizza Hut is a work in progress, but shows signs of improvement. Overall, Yum’s spinoff strategy has delivered a straightforward and affordable bet on Chinese consumer appetite.

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Yum China said on Feb. 7 that fourth-quarter adjusted earnings rose 18 percent year on year to $74 million. The adjusted figure accounts for currency moves and the impact of U.S. tax changes.

Overall quarterly revenue at the country’s biggest fast-food group hit $2.2 billion, representing a 9 percent increase at constant exchange rates. Same-store sales, or those at restaurants open for more than a year, rose 5 percent.

However, while same-store sales at KFC rose 7 percent, those at the smaller Pizza Hut business increased just 1 percent. Chief Operating Officer Joey Wat, who will replace outgoing Micky Pant as chief executive in March, said the company still faced challenges in the “revitalization of Pizza Hut”.

Yum China’s New York-listed share price fell 4.4 percent in after-market trade to $42.35.

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