Yum China shares rose in extended trading after Yum Brands’ licensee in mainland China reported upbeat comparable sales in the third quarter, declared a dividend and said its chief executive will step down next year.
Yum China said current chief executive Micky Pant, who led the company through its spin-off, would transition to serving as vice chairman of the board and a senior adviser to the company effective March 2018. He will be succeeded by president and chief operation officer Joey Wat.
Mr Pant said:
Joey has a strong track record of achieving results, and with her unique ability to translate vision and strategy into future world-class operations, I have no doubt that the Yum China business will continue to grow under her strong leadership. Leveraging the unprecedented growth opportunity that China presents, the Board and the Yum China team are confident that she is the best person to take the Company to its next level.
The news of the succession came alongside an earnings release showing that same-stores sales — a measure of sales at stores that have been open a year or longer — rose 6 per cent in the third quarter. Same-store sales at KFC grew 7 per cent, while those at Pizza Hut remained flat. Analysts had expected Yum China’s overall same-store sales to rise 2.9 per cent.
Revenues grew 8.2 per cent to $2.04bn, topping estimates of $1.99bn.
Net income rose to $211m, or 53 cents a share, in the three months ended in August, compared with $192m, or 53 cents a share, in the year-ago period. That was, however, shy of analysts’ expectations for 57 cents a share.
“We are pleased to report the third consecutive quarter of delivering positive same-store sales growth,” Mr Pant said. “With revenues exceeding $2 billion in the quarter, restaurant margin, operating profit and net income have all improved.”
The board of the company, which spun off from its parent Yum Brands last year, also approved a cash dividend of 10 cents a share and boosted the existing share buyback programme from about $300m to about $550m.
Yum China shares rose 3.6 per cent to $41.45 in extended trading.