Upcoming AWS Coverage on Restaurant Brands International
LONDON, UK / ACCESSWIRE / April 13, 2017 / Active Wall St. announces its post-earnings coverage on Yum China Holdings, Inc. (NYSE: YUMC). The Company reported its financial results for the first quarter fiscal 2017 (Q1 FY17) on April 06, 2017. The Shanghai, China-based Company's diluted EPS grew 12% y-o-y, beating market consensus estimates. Register with us now for your free membership at:
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One of Yum China Holdings' competitors within the Restaurants space, Restaurant Brands International Inc. (NYSE: QSR), is estimated to report earnings on April 27, 2017. AWS will be initiating a research report on Restaurant Brands following the release of its next earnings results.
Today, AWS is promoting its earnings coverage on YUMC; touching on QSR. Get our free coverage by signing up to:
http://www.activewallst.com/register/
Earnings Reviewed
Yum China reported total revenues of $1.28 billion in Q1 FY17, which came in marginally below $1.30 billion recorded in Q1 FY16. However, total revenues numbers for Q1 FY17 topped market consensus estimates of $1.27 billion. During the reported quarter, same-store sales grew 1% y-o-y, with same-store sales growth of 1% at KFC and 2% same-store sales growth at Pizza Hut Casual Dining.
The restaurant operator's net income for Q1 FY17 came in at $175 million, or $0.44 per diluted share compared to $145 million, or $0.40 per diluted share, in Q1 FY16. Wall Street had expected the Company to report net income of $0.38 per diluted share.
During the quarter ended February 28, 2017, the Company inaugurated 133 new stores, comprising of 72 KFC stores, 30 Pizza Hut Casual Dining stores, and 31 Pizza Hut Home Service, Little Sheep, East Dawning and Taco Bell stores. Moreover, the Company had 7,663 stores at the end of Q1 FY17 versus 7,205 at the close of Q1 FY16.
Operating Metrics
For Q1 FY17, the Company's net total costs and expenses fell marginally to $1.03 billion from $1.09 billion in the previous year's same quarter. Additionally, the Company's operating profit increased 22% to $254 million in Q1 FY17 from $209 million in the prior year's comparable period. Adjusted EBITDA for Q1 FY17 came in at $320 million, up 14% from $279 million in Q1 FY16. Additionally, total restaurant margin increased to 23.0% in Q1 FY17 from 19.3% in Q1 FY16, primarily aided by the impact of retail tax structure reform implemented on May 01, 2016.
Segment-wise
Yum China's KFC segment reported total revenues of $896 million in Q1 FY17 compared to $921 million in Q1 FY16. The segment's operating profit came in at $207 million, or 23.8% of total segment's revenues in Q1 FY17 versus $191 million, or 21.3% of total segment's revenues in the previous year's same quarter. Moreover, the segment's margin improved during Q1 FY17 to 23.6% from 21.2% in Q1 FY16.
Pizza Hut's total revenues grew 3% to $339 million in Q1 FY17 from $328 million in the previous year's corresponding quarter. Furthermore, the segment reported operating profit of $65 million, or $19.3% of total restaurant revenues, in Q1 FY17 up from $39 million, or 12.0% of total restaurant revenues, in the prior year's comparable quarter. Furthermore, restaurant's margin for the reported quarter was 23.0%, up from 15.8% in Q1 FY16.
Cash Flow and Balance Sheet
In the three months ended February 28, 2017, Yum China reported net cash provided by operating activities of $357 million compared to $373 million in the first three months of FY16. As on February 28, 2017, the Company had cash and cash equivalents balance of $1.07 billion compared to a balance of $885 million as on December 31, 2016.
Separation from Yum! Brands
On November 01, 2016, Yum China announced that it has completed its separation from Yum! Brands Inc. (NYSE: YUM). Yum China had begun trading as an independent Company on the New York Stock Exchange (NYSE) under the ticker symbol "YUMC."
Earnings Outlook
In its guidance for full year FY17, Yum China expects to add 550 to 600 new stores. The Company forecasts operating profit during FY17 to grow at double digit with margin expansion. Furthermore, the Company anticipates a strong free cash flow in FY17 with enhanced balance sheet position.
Stock Performance
At the closing bell, on Wednesday, April 12, 2017, Yum China Holdings' stock rose slightly by 0.43%, ending the trading session at $32.64. A total volume of 3.61 million shares were traded at the end of the day, which was higher than the 3-month average volume of 2.96 million shares. In the last month and previous three months, shares of the Company have advanced 25.54% and 25.25%, respectively. Moreover, the stock gained 24.96% since the start of the year. Shares of the company have a PE ratio of 23.08 and currently have a market cap of $12.65 billion.
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