Yum China’s Q3 profit to take 50-60% hit due to COVID Delta variant, company warns
Over 500 restaurants in 17 provinces were closed or offered only takeaway and delivery.
Yum China warned its adjusted operating profit would take a 50% to 60% hit in the third quarter as a result of the spread of the Delta variant in the country.
In an update, the KFC and Pizza Hut operator said over 500 of its restaurants in 17 provinces were closed or offered only takeaway and delivery services at the peak of the variant’s outbreak in August, which led to a mid-teens percentage drop in same-store sales.
“While the outbreak has subsided in recent days and restaurant traffic is gradually recovering, our operations continue to be heavily impacted,” Yum China said, adding it expects “a recovery of same-store sales to take time.”
Despite profit margins being pressured by higher commodity prices, wage inflation and an increase in promotions, the company will accelerate its store network expansion, expecting to open 1,300 gross new stores in 2021.