Yum China (YUMC) To Report Earnings Tomorrow: Here Is What To Expect

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Fast-food company Yum China will be announcing earnings results this Wednesday before market open. Here’s what to look for.

Yum China met analysts’ revenue expectations last quarter, reporting revenues of $3.21 billion, up 4.4% year on year. It was a mixed quarter for the company, with a narrow beat of analysts’ EBITDA estimates.

Is Yum China a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Yum China’s revenue to grow 4.7% year on year to $2.72 billion, in line with the 4.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.37 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Yum China has missed Wall Street’s revenue estimates five times over the last two years.

Looking at Yum China’s peers in the restaurants segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Starbucks delivered year-on-year revenue growth of 5.5%, beating analysts’ expectations by 2.6%, and Brinker International reported revenues up 6.9%, topping estimates by 2.9%. Starbucks traded down 1.9% following the results while Brinker International was up 2.1%.

Read our full analysis of Starbucks’s results here and Brinker International’s results here.

There has been positive sentiment among investors in the restaurants segment, with share prices up 2.1% on average over the last month. Yum China is up 6.9% during the same time and is heading into earnings with an average analyst price target of $58.29 (compared to the current share price of $50).

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Spotting Winners: Yum! Brands (NYSE:YUM) And Traditional Fast Food Stocks In Q3

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Restaurant Brands International

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Yum! Brands and the rest of the traditional fast food stocks fared in Q3.

Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.

The 13 traditional fast food stocks we track reported a satisfactory Q3. As a group, revenues were in line with analysts’ consensus estimates.

Thankfully, share prices of the companies have been resilient as they are up 9.1% on average since the latest earnings results.

Yum! Brands

Spun off as an independent company from PepsiCo, Yum! Brands is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.

Yum! Brands reported revenues of $1.98 billion, up 8.4% year on year. This print fell short of analysts’ expectations by 1.2%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but a slight miss of analysts’ revenue estimates.

Interestingly, the stock is up 14.5% since reporting and currently trades at $159.62.

Best Q3: Dutch Bros

Started in 1992 by two brothers as a single pushcart, Dutch Bros is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.

Dutch Bros reported revenues of $423.6 million, up 25.2% year on year, outperforming analysts’ expectations by 2.3%. The business had an exceptional quarter with a solid beat of analysts’ same-store sales estimates and an impressive beat of analysts’ revenue estimates.

Dutch Bros scored the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 10.5% since reporting. It currently trades at $62.11.

Weakest Q3: Papa John's

Founded by the eclectic John “Papa John” Schnatter, Papa John’s is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.

Papa John's reported revenues of $508.2 million, flat year on year, falling short of analysts’ expectations by 2.9%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations.

As expected, the stock is down 12.2% since the results and currently trades at $36.24.

Read our full analysis of Papa John’s results here.

Restaurant Brands

Formed through a strategic merger, Restaurant Brands International is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.

Restaurant Brands reported revenues of $2.45 billion, up 6.9% year on year. This print beat analysts’ expectations by 2.4%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ same-store sales estimates.

The stock is up 4.3% since reporting and currently trades at $68.42.

Read our full, actionable report on Restaurant Brands here, it’s free.

Yum China

One of China’s largest restaurant companies, Yum China is an independent entity spun off from Yum! Brands in 2016.

Yum China reported revenues of $3.21 billion, up 4.4% year on year. This result was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it underperformed in some other aspects of the business.

The stock is up 8.7% since reporting and currently trades at $47.80.

Read our full, actionable report on Yum China here, it’s free.

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Winners And Losers Of Q3: Yum China (NYSE:YUMC) Vs The Rest Of The Traditional Fast Food Stocks

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As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at traditional fast food stocks, starting with Yum China .

The 13 traditional fast food stocks we track reported a satisfactory Q3. As a group, revenues were in line with analysts’ consensus estimates.

Luckily, traditional fast food stocks have performed well with share prices up 11.2% on average since the latest earnings results.

Yum China

One of China’s largest restaurant companies, Yum China is an independent entity spun off from Yum! Brands in 2016.

Yum China reported revenues of $3.21 billion, up 4.4% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ EBITDA estimates.

Interestingly, the stock is up 10.6% since reporting and currently trades at $48.65.

Best Q3: Dutch Bros

Started in 1992 by two brothers as a single pushcart, Dutch Bros is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.

Dutch Bros delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 9.5% since reporting. It currently trades at $61.55.

Weakest Q3: Papa John's

Founded by the eclectic John “Papa John” Schnatter, Papa John’s is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.

As expected, the stock is down 7.8% since the results and currently trades at $38.05.

Read our full analysis of Papa John’s results here.

Domino's

Founded by two brothers in Michigan, Domino’s (NYSE:DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.

Domino's reported revenues of $1.15 billion, up 6.2% year on year. This print beat analysts’ expectations by 0.9%. It was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and a narrow beat of analysts’ revenue estimates.

The stock is up 1% since reporting and currently trades at $412.37.

Read our full, actionable report on Domino's here, it’s free.

El Pollo Loco

With a name that translates into ‘The Crazy Chicken’, El Pollo Loco is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico.

El Pollo Loco reported revenues of $121.5 million, flat year on year. This number lagged analysts' expectations by 2%. Taking a step back, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but a miss of analysts’ revenue estimates.

The stock is up 24% since reporting and currently trades at $11.22.

Read our full, actionable report on El Pollo Loco here, it’s free.

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