Yum China Profit May Drop 60% On Covid-19 Fallout; Stock Slides

Yum China Profit May Drop 60% On Covid-19 Fallout; Stock Slides

A KFC restaurant in China. (Photo by Zhang Peng/LightRocket via Getty Images) Yum China, the country's largest restaurant chain, warned today that disruptions in connection with Covid-19 will take a bite out of profit and sales in the third quarter. Adjusted operating profit, which excludes special items, may fall "approximately 50% to 60%" compared with the same period of last year, Yum China said in a Hong Kong Stock Exchange filing today. The company operates KFC, Pizza Hut and other restaurants in the country. Yum China's shares fell by 1. 16% in Hong Kong this morning to HK$61. 22 after the announcement. The stock also trades in New York. China said today retail sales in August grew by a lower than expected 2. 5% from a year earlier, as Covid-19 lockdowns hurt consumer sentiment. Underscoring the continuing impact of the pandemic in the world's second-largest economy, China airline passenger travel in August fell by 51% from a year earlier, the government reported yesterday. (See post here.) Goldman last month lowered its forecast of China third-quarter GDP growth to 2. 3% year on year from 5. 8% on concerns about Covid-19 fallout. Send me a secure tip I'm a senior editor