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

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

Fast-food company Yum China (NYSE:YUMC) will be announcing earnings results tomorrow afternoon. Here's what to expect.

Yum China beat analysts' revenue expectations by 7% last quarter, reporting revenues of $2.49 billion, up 19.4% year on year. It was a stunning quarter for the company, with an impressive beat of analysts' revenue estimates.

Is Yum China a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Yum China's revenue to grow 4.3% year on year to $3.04 billion, slowing from the 9.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.65 per share.

Yum China Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they are expecting 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 Q1 results, giving us a hint as to what we can expect. Darden delivered year-on-year revenue growth of 6.8%, missing analyst expectations by 1.7%, and Kura Sushi reported revenues up 30.4%, topping Wall Street's consensus estimates by 1.1%. Darden traded down 4.9% following the results while Kura Sushi was up 2.7%.

Read our full analysis of Darden's results here and Kura Sushi's results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the restaurants stocks have fared somewhat better, they have not been spared, with share price declining 4.9% over the last month. Yum China is down 0.7% during the same time and is heading into earnings with an average analyst price target of $56.1 (compared to share price of $39.91).

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