Exhibit 99.1

Yum China Reports Fourth Quarter and Fiscal Year 2018 Results

 

Fourth quarter total revenues grew 2% or 7% in constant currency;

Fourth quarter total system sales grew 6% and same-store sales grew 2% in constant currency;

Opened 819 gross new stores in 2018

 

Shanghai, China (January 31, 2019) – Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC) today reported unaudited results for the fourth quarter and year ended December 31, 2018. Reported GAAP results include Special Items, which are excluded from adjusted measures.  Special Items are not allocated to any segment and therefore only impact reported GAAP results of Yum China.  See “Reconciliation of Reported GAAP Results to Adjusted Measures” within this release.

 

Fourth Quarter Highlights

 

Total revenues increased 2% year over year to $1.91 billion from $1.87 billion (7% year over year increase excluding foreign currency translation (“F/X”)).

 

Total system sales grew 6% year over year, with 9% growth at KFC partially offset by a 2% decline at Pizza Hut, excluding F/X.

 

Same-store sales grew 2% year over year, with a 3% increase at KFC and a 4% decrease at Pizza Hut, excluding F/X.

 

Restaurant margin was 11.5%, as compared with 11.6% in the prior year period.

 

Operating Profit increased 77% year over year to $84 million from $47 million (84% year over year increase excluding F/X).

 

Reported an impairment charge of $12 million on intangible assets acquired from DAOJIA.com.cn (“Daojia”). Excluding this special item, Adjusted Operating Profit increased to $96 million from $47 million in the prior year period.

 

Net Income increased to $74 million from a net loss of $107 million in the prior year period.

 

Recognized a tax benefit of $36 million in the fourth quarter 2018 as a result of adjusting the provisional amount of transition tax related to US tax reform previously recorded in fourth quarter 2017. Excluding the one-time tax benefit and the Daojia impairment, Adjusted Net Income decreased 19% to $46 million, primarily driven by the mark to market loss of $27 million on our equity investment in Meituan Dianping.

 

Diluted EPS increased to $0.19 from negative $0.28 in the prior year period. Adjusted Diluted EPS decreased 14% to $0.12 from $0.14 in the prior year period (36% year over year increase excluding the mark to market loss impact of our equity investment in Meituan Dianping).

 

Full Year Highlights

 

Total revenues increased 8% year over year to $8.42 billion from $7.77 billion (6% year over year increase excluding F/X).

 

Total system sales grew 5% year over year, with 7% growth at KFC partially offset by a 1% decline at Pizza Hut, excluding F/X.

 

Same-store sales increased 1% year over year, with a 2% increase at KFC and a 5% decrease at Pizza Hut, excluding F/X.

 

Restaurant margin was 15.7%, as compared with 16.7% in the prior year.

 

Operating Profit increased 21% year over year to $941 million from $778 million (16% year over year increase excluding F/X). Adjusted Operating Profit increased 10% year over year to $855 million from $775 million (6% year over year increase excluding F/X).

 

Net Income increased 78% to $708 million from $398 million in the prior year (70% year over year increase excluding F/X). Adjusted Net Income increased 9% to $606 million from $559 million in the prior year (4% year over year increase excluding F/X).

 

Effective tax rate was 22.6%. Excluding the adjustment made in the fourth quarter 2018 to the provisional amount of transition tax related to US tax reform previously recorded in 2017, the effective tax rate was 26.5%.

 

Diluted EPS increased 79% to $1.79 from $1.00 in the prior year. Adjusted Diluted EPS increased 9% to $1.53 from $1.40 in the prior year (14% year over year increase excluding the mark to market loss impact of our equity investment in Meituan Dianping).

 

Opened 819 new restaurants during the year, bringing total store count to 8,484 across more than 1,200 cities.

Yum China Holdings, Inc. •  Shanghai, China •  Website http://ir.yumchina.com

 


The following information was filed by Yum China Holdings, Inc. (YUMC) on Thursday, January 31, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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