KFC operator Yum’s same-store sales, profit as lockdowns bite

(Reuters) – Yum Brands Inc (YUM.N) reported a 7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} fall in quarterly comparable store sales on Wednesday, as many restaurants across its brands were closed or limited to delivery and take-away due to lockdowns to curb the spread of the novel coronavirus.

The company said it incurred a goodwill impairment charge of $139 million from its purchase of Habit Burger Grill, a burger chain it bought earlier this year.

“First-quarter results reflect two different realities. We began the year with momentum … however as the quarter progressed we were heavily impacted by the unfortunate spread of COVID-19,” Chief Executive Officer David Gibbs said in a statement.

Restaurants across the globe have shut their dining areas and shifted to a delivery and take-away model due to the lockdowns imposed to combat the health crisis.

For Yum, which operates about 50,000 restaurants globally, KFC and Pizza Hut were the hardest hit. Taco Bell, known for its budget offerings, was a bright spot.

Yum said sales at stores open for more than a year fell 8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} at KFC and declined 11{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} at Pizza Hut, while they rose 1{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} at Taco Bell.

Analysts has expected a 6.16{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} fall at KFC, 6.55{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} decline at Pizza Hut and 2.18{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} dip at Taco Bell, according to IBES data from Refinitiv.

Overall, analysts had forecast a 6.94{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} drop.

Net income fell to $83 million, or 27 cents per share, in the first quarter ended March 31 from $262 million, or 83 cents per share, a year earlier.

The company also recorded $22 million of pre-tax investment expense related to the change in fair value of its investment in food delivery firm GrubHub Inc (GRUB.N)