FOOD SERVICES | Staff Reporter, China

Yum China's net income crashed 20% in 2017

For the fourth quarter, Yum's operating profit rose by 23% to $71 million.

Yum China Holdings, Inc. has reported unaudited results for the fourth quarter and full year ended December 31, 2017. Yum China reported a same-store sales growth of 4%, with an increase of 5% at KFC and 1% at Pizza Hut. Total system sales grew 8%, including growth of 9% at KFC and 7% at Pizza Hut. Yum has opened 691 new restaurants during the full year, bringing total store count to 7,983 across more than 1,200 cities.

Its restaurant margin improved 1.5 percentage points to 16.8%, primarily driven by same-store sales leverage and aided by the impact of retail tax structure reform. Full year's operating profit was $785 million, an increase of 23%.

Its net income was noticeably down with $403 million, a decrease of 20%. Excluding special items, adjusted net income was $564 million, an increase of 20%.

Yum China CEO Micky Pant said, "2017 marks the first full year of Yum China as an independently listed company and we are pleased with high single-digit system sales growth and double-digit operating profit growth. Our development team has again exceeded expectations in opening 691 new restaurants in 2017. I am very pleased to hand over the reins to Joey Wat as our new CEO from March 1st; she has demonstrated an excellent track record and is the right person leading Yum China as we head into 2018, with challenging sales and profit laps particularly in the first half of the year."

Yum China President and COO Joey Wat, "All of us at Yum China are committed to building leading brands for the long term through innovation. We will focus on our strategic priorities on digital and delivery, while continuing to improve our food and in-store experience. While we finished 2017 with a solid sales momentum, we continue to face challenges of the revitalization of Pizza Hut and lapping of two very successful Chinese New Year promotions. However I remain confident in the growth opportunities and long term prospects of Yum China." 

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