Yum China

Yum China's Pizza Hut recorded a 5% decline in same-store sales during the third quarter. Credit: Pizza Hut.

Yum China Holdings has reported total revenues of $2.22bn in the third quarter (Q3) ending 30 September 2018, a 4% increase compared to the previous year.

The restaurant company also reported a 2% increase in operating profit to $269m, compared to $264m for the same period in the previous year.

The company’s net income increased by 15% to $203m, whereas the total system sales increased by 4% and same-store sales declined by 1%.

Yum China CEO Joey Wat said: “We recorded 4% system sales growth during the third quarter, excluding foreign exchange impact, as we expanded our portfolio and delivered more value-oriented offerings to address growing competition and softer trading conditions.

“KFC continued to perform well, posting 1% same-store sales growth during the quarter, on top of a 10% growth in the same period last year. Pizza Hut recorded a 5% decline in same-store sales during the quarter, as healthy growth in delivery was offset by lower dine-in traffic.

“We are excited by the opportunity to grow our portfolio in China’s western quick service restaurant and casual dining markets.”

“We made further progress on the revitalisation programme as we launched a refreshed brand identity, improved our value proposition, expanded our digital capabilities to include tableside ordering via mobile, and generated greater delivery traffic through our own channels.”

During this quarter, the chain opened 195 new locations and remodelled 209 restaurants. It currently operates a total of 8,313 stores in more than 1,200 cities.

Additionally, delivery contributed to 17% of company sales, mobile payments accounted for 64% and digital payments 82%. Delivery services increased from 864 cities to 1,063.

Wat added: “Looking ahead, we are excited by the opportunity to grow our portfolio in China’s western quick service restaurant and casual dining markets.

“We will continue to add a range of store formats across the spectrum of low and high tier cities to drive growth.

“We will also build out our digital and delivery eco-system so that we can better serve our customers and create a seamless online to offline experience.”