LONDON, UK / ACCESSWIRE / October 13, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Yum China Holdings, Inc. (NYSE: YUMC) ("Yum China"), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=YUMC, following the Company's release of its financial results on October 05, 2017, for the third quarter of the fiscal year 2017. Yum China reported better than expected revenue. 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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For the three months ended August 31, 2017, Yum China's total revenue increased 8.23% to $2.04 billion from $1.88 billion in Q3 FY16. During Q3 FY17, the Company's same store sales growth was 6%. The total revenue numbers surpassed analysts' expectations of $1.98 billion.
During Q3 FY17, the Company's adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) increased 8.9% to $425 million from $390 million in Q3 FY16. For the reported quarter, the Company's adjusted EBITDA margin increased 10 basis points to 20.8% of revenue from 20.7% of revenue in Q3 FY16.
During Q3 FY17, Yum China's restaurant expenses increased 7.3% to $1.60 billion from $1.49 billion in Q3 FY16. For the reported quarter, the Company's restaurant margin increased 80 basis points to 20.0% of revenue from 19.2% of revenue in Q3 FY16, due to same-store sales leverage and labor efficiency. In Q3 FY17, the Company's G&A expenses decreased 18.8% to $120 million from $101 million in Q3 FY16, as a result of high compensation cost, partially attributable to hiring additional personnel and higher professional fees. For the reported quarter, the Company's D&A expenses increased 3.9% to $105 million from $101 million in Q3 FY16.
During Q3 FY17, Yum China's operating income increased 10.8% to $317 million from $286 million in Q3 FY16, while its operating margin increased 30 basis points to 15.5% of revenue from 15.2% of revenue in Q3 FY16. For the reported quarter, the Company's adjusted operating income increased 10.9% to $314 million from $283 million in Q3 FY16.
During Q3 FY17, Yum China's effective tax rate was 31.7%, compared to 29.8% in Q3 FY16. For the reported quarter, the Company's adjusted effective tax rate was 32.0% compared to 29.9% in Q3 FY16.
During Q3 FY17, Yum China's net income increased 9.9% to $211 million on a y-o-y basis from $192 million in Q3 FY16. During Q3 FY17, Yum China's diluted earnings per share (EPS) was at par with the $0.53 reported in Q3 FY16. For the reported quarter, the Company's adjusted diluted EPS was also at par with the $0.52 of Q3 FY16. The adjusted diluted EPS was below analysts' expectations of $0.56.
During Q3 FY17, the Company's Board of Directors increased its existing share repurchase authorization to $550 million from $300 million.
KFC - During Q3 FY17, Yum China's KFC segment's total revenue increased 9.7% to $1.42 billion from $1.30 billion in Q3 FY16. During Q3 FY17, the segment's same store sales growth was 7%. For the reported quarter, the segment's restaurant margin increased 140 basis points to 21.1% of revenue from 19.7% of revenue in Q3 FY16. During Q3 FY17, the segment's operating margin increased 190 basis points to 20.7% of revenue from 18.8% of revenue in Q3 FY16. The increase was due to same-store sales leverage.
Pizza Hut - During Q3 FY17, Yum China's Pizza Hut segment's total revenue increased 5.2% to $604 million from $574 million in Q3 FY16. For the reported quarter, the segment's restaurant margin decreased 90 basis points to 17.8% of revenue from 18.7 % of revenue in Q3 FY16. The decrease was primarily due promotion costs and high labor costs. During Q3 FY17, the segment's operating margin decreased 60 basis points to 13.3% of revenue from 13.9% of revenue in Q3 FY16.
As on August 31, 2017, Yum China's cash and cash equivalents increased 67.2% to $1.48 billion from $885 million in Q4 FY16.
During Q3 FY17, the Company's net accounts receivable increased 9.4% to $81 million from $74.0 million in Q4 FY16.
For the reported quarter, Yum China's net inventories decreased 8.2% to $246 million from $268 million in Q4 FY16.
For the reported quarter, the Company's accounts payable and other current liabilities increased 15.3% to $1.12 billion from $971 million in Q4 FY16.
During FY17, Yum China's YTD cash provided by operating activities increased 19.7% to $987 million from $824 million in the same period of last year.
On October 05, 2017, the Company's Board of Directors approved a quarterly cash dividend program, and declared an initial cash dividend of $0.10 per share on its common stock, payable on December 21, 2017, to stockholders of record as of the close of business on November 30, 2017.
On Thursday, October 12, 2017, the stock closed the trading session at $42.94, climbing 1.30% from its previous closing price of $42.39. A total volume of 3.08 million shares have exchanged hands, which was higher than the 3-month average volume of 2.52 million shares. Yum China's stock price soared 16.72% in the last one month, 15.83% in the past three months, and 30.16% in the previous six months. Furthermore, since the start of the year, shares of the Company have skyrocketed 64.40%. The stock is trading at a PE ratio of 28.97 and, currently, has a market cap of $16.66 billion.
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