KFC and Pizza Hut Show China's Restaurant Industry Is Quickly Recovering From the Pandemic
The COVID-19 pandemic continues to have an adverse effect on business around the globe, with the restaurant industry being among the industries negatively impacted the most. But for some chains, things could be far worse. The sole licensee of KFC, Pizza Hut, and Taco Bell in China from Yum! Brands (NYSE: YUM) -- Yum China (NYSE: YUMC) -- fared pretty well during the second quarter of 2020, all things considered.
Nearly all of Yum China's more than 10,000 locations (a milestone reached in July) are open again; and while recovery slowed to a trickle in June and July as ongoing actions to fight the spread of the virus continued, revenue had rebounded back to 93% of where it was a year ago. Specifically, KFC comparable-store sales (an average of foot traffic and value of guest orders) were 90% of what they were in the second quarter of 2019. Pizza Hut was at 88%.
There's work to be done before Yum China can claw its way back to where it was at the start of 2020, but it's enviable progress compared to where many other restaurants are sitting at the moment. The key to its success lies in its sizable digital business and ability to invest even in lean times. And still operating in the black with ample cash and no debt on the books, this remains one of my favorite restaurant stocks.
Source Fool.com
