LONDON, UK / ACCESSWIRE / July 13, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Yum China Holdings, Inc. (NYSE: YUMC), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=YUMC, following the Company's release of its financial results for the second quarter fiscal 2017 on July 07, 2017. The restaurant operator in China met markets earnings expectations, and also reported same-store sales growth on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For three months ended May 31, 2017, YUMC's total revenue was $1.594 billion compared to $1.588 billion in Q2 FY16. For the reported quarter, the Company's overall same-store sales increased by 3% and system sales increased by 7% before foreign exchange translation. The comparable sales increased 3% exceeding analysts' expectations of 2.4%.

During Q2 FY17, YUMC's total delivery sales reached $200 million, comprising of about 13% of the Company's total sales. In Q2 FY17, the Company's membership program surpassed 100 million members and over 40% of total sales were settled with the mobile payment.

For the reported quarter, YUMC's operating profit increased 64.4% to $143 million from $87 million in Q2 FY16, reflecting the benefit of retail tax reform and same-store sales leverage. On a y-o-y basis, the operating profit increased 73%, excluding the impact of foreign exchange. For the reported quarter, G&A cost increased 9% in local currency due to higher compensation cost and public Company expenses. The effective tax rate was 22.9% for Q2 FY17 compared to 18.6% for Q2 FY16.

For Q2 FY17, YUMC's net income increased 38.9% to $107 million from $77 million in the same quarter last year. For the reported quarter, the Company's diluted EPS was $0.27, up 29% on a y-o-y basis compared to EPS of $0.21 per share in the prior year's same quarter. The Company's earnings numbers met Wall Street's expectations of $0.21 per share.

During the reported quarter, YUMC opened 90 new restaurants and remodeled nearly 200 stores led by KFC and had a total of 7,685 restaurants at the end of Q2 FY17.

Balance Sheet

As on May 31, 2017, YUMC's cash and short-term investments increased 24.5% to $1.20 billion from $964 million in Q2 FY16. The Company generated free cash flows of $296 million for the reported quarter. The Company's average pretax cash payback period for KFC new unit was below three years and for Pizza Hut it was below four years.

During the quarter, YUMC acquired Daojia, an online delivery Company, with 80% stake on a fully diluted basis for a total cash consideration of $61.7 million, including $36.7 million to selling shareholders and $25 million in capital contribution.

During the quarter, the Company repurchased Yum China shares at $39 million at an average price of $36.27 per share. At the end of Q2 FY17, the Company had $261 million remaining under share repurchase authorization.

Outlook

For FY17, YUMC is expecting to meet long-term target of 17% restaurant margin and forecasts G&A increase in high single digit percentage excluding the impact of foreign exchange. The Company expects to deliver 550-600 new units along with double-digit operating profit growth excluding foreign exchange for the full year.

Stock Performance

Yum China's share price finished yesterday's trading session at $37.55, slightly advancing 0.59%. A total volume of 2.85 million shares has exchanged hands. The Company's stock price skyrocketed 15.54% in the last three months and 43.43% in the previous six months. Additionally, the stock soared 43.76% since the start of the year. Shares of the Company have a PE ratio of 26.56 and currently have a market cap of $16.57 billion.

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