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Restaurant chain Yum China has shut more than 30% of its stores temporarily as China struggles to contain the outbreak of the novel coronavirus (2019-nCoV).
According to a Reuters report, the company may close more outlets and cut operating hours based on the situation.
One of the largest restaurant chains in the country, Yum China is a licensee of KFC, Pizza Hut and Taco Bell brands in China. It operates around 9,200 restaurants located across 1,300 cities and towns.
The company also anticipates a significant hit on its sales and may report an operating loss in the first quarter of this year.
It added that same-store sales at restaurants that continued to operate saw a decline of up to 50% since the Lunar New Year holiday period.
Yum China is yet to fully determine the losses it incurred due to the outbreak.
Last week, Starbucks warned of a similar impact on its business in China. The coffeehouse chain has closed around 2,000 restaurants and adjusted its operating hours in the Chinese market.
However, Yum China is optimistic about the growth of its Chinese business in the long term. The fast-food chain also plans to open 800-850 new stores in the country this year, provided the impact of the virus subsides.
In the fourth quarter of 2019, the company’s same-store sales registered an increase of 2%. The adjusted profit stood at $0.25 per share.
Meanwhile, the death toll from coronavirus jumped to 565.