Yum China beats estimates on KFC, but Pizza Hut disappoints on same-store sales

Yum China Holdings Inc edged past analysts’ profit and revenue estimates on Wednesday (US time), but the company’s shares fell as its Pizza Hut unit missed same-store sales expectations.

The company’s shares were down 4.6 percent at $42.25 in after-market trading.

The stock gained about 53 percent in 2017.

“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,” said Chief Operating Officer Joey Wat.

Wat is scheduled to take over as chief executive in March, when current chief Micky Pant steps down.

Pizza Hut has been a drag on the company’s performance, offsetting gains from stronger growth at the company’s KFC unit.

Same-store sales in the Pizza Hut division rose only 1 percent in the fourth quarter, below analysts’ estimate of a 1.5 percent gain.

In contrast, same-store sales at KFC rose 7 percent, beating estimates for growth of 4 percent.

Total same-restaurant sales jumped 5 percent in the quarter, beating analysts’ expectation of a 3 percent increase.

Yum China, the nation’s biggest fastfood chain with about 7,685 outlets, reported a loss of $90 million, or 23 cents per share, compared with a profit of $88 million, or 23 cents per share, a year earlier.

The company incurred an estimated one-time income tax charge of $164 million in the fourth quarter due to the recent changes to the US tax law.

Excluding the tax gain and other onetime items, the company posted a profit of 19 cents, beating analysts’ estimate of 18 cents.