COVID-19 resurgence in China had dented sales of Yum China Holdings Inc for Q1

Yum China Holdings Inc said on Monday a COVID-19 resurgence in the country in recent weeks had dented its sales for the first quarter, setting back the recovery of its KFC, Pizza Hut and Taco Bell joints.

Same-store sales decreased around 20% for the first two weeks of March from a year earlier, after falling nearly 4% for the two months combined in January and February, Yum China said, reports Reuters.

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“Entering March, the situation has rapidly deteriorated with the highly transmissible Omicron variant causing outbreaks across China, including economically important regions of Guangdong, Shanghai, Shandong and Jilin,” the company said.

The restaurant chain recorded a 1% fall in same-store sales last year, an improvement from the 9% decline in 2020. However, tight curbs on travel and dining out due to the rapid spread of the Omicron coronavirus variant have hurt sales this year.

The company projected an operating profit for the first quarter to be in a range of $165 million to $200 million, compared with $342 million a year earlier.

China has reported more local symptomatic COVID-19 cases so far this year than it recorded in all of 2021, as the highly transmissible Omicron variant triggers outbreaks from Shanghai to Shenzhen. read more

Over 1,100 Yum China restaurants were temporarily closed or offering only takeaway and delivery services, as of Sunday.

Yum China’s shares, which have taken a beating in recent days due to an auditing dispute between Beijing and Washington, declined 2% in premarket trading.

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