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Yum China, owner of KFC and Pizza Hut, beats estimates as low-price strategy draws diners
- The fast-food chain posted a net profit of US$212 million for the April to June quarter, beating analysts’ estimates of US$190 million
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Daniel Renin Shanghai
Yum China Holdings, which owns the KFC and Pizza Hut restaurant chains in mainland China, beat analysts’ earnings estimates after its low-price strategy bolstered sales and increased market share in the second quarter.
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The company on Tuesday reported a net profit of US$212 million for the three months to June, a 7 per cent year on year increase. It was 11.6 per cent higher than a median forecast of US$190 million by analysts in a Bloomberg survey. Revenue rose 1 per cent year on year to US$2.68 billion.
Yum China’s Hong Kong-listed shares jumped 10.6 per cent to HK$252.80.
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“Our sharp focus on value-for-money and innovative new products worked well, driving robust same-store transaction growth,” CEO Joey Wat said in a statement on Tuesday. “We took proactive actions to improve operational efficiency, stabilising restaurant margin and expanding operating margin year over year.”
Worries about a slowing economy, job prospects and wages have deterred mainland consumers from dining out since the country’s reopening from the Covid-19 pandemic in the first quarter of 2023.
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