Shares of restaurant company Yum China (NYSE: YUMC) -- parent company of KFC, Pizza Hut, and more in China -- dropped on Tuesday after it reported financial results for the first quarter of 2024. The company grew sales by opening new restaurants, but sales at existing restaurants fell, which was not something investors cared for. As of 10 a.m. ET, Yum China stock was down 6%, but it had been down 10% earlier in the day.

In Q1, Yum China surpassed 15,000 restaurant locations, including over 10,600 KFC locations and over 3,400 Pizza Hut locations. Overall, the company opened nearly 400 new restaurants in Q1, which boosted total sales by 6% year over year. However, same-store sales pulled back by 3%, weighing negatively on the stock today.

Also weighing negatively on Yum China is its profitability. The company had a Q1 operating margin of 12.7%, which isn't bad in absolute terms. However, it is a step back from the 14.3% operating margin it had in the prior-year period.

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Source Fool.com