Yum China (YUMC) Q2 Earnings Report Preview: What To Look For

Fast-food company Yum China (NYSE:YUMC) will be reporting results this Thursday before market hours. Here’s what investors should know.

Yum China beat analysts’ revenue expectations last quarter, reporting revenues of $3.27 billion, up 9.7% year on year. It was a satisfactory quarter for the company, with a solid beat of analysts’ EBITDA estimates but a slight miss of analysts’ same-store sales estimates.

Is Yum China a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting Yum China’s revenue to grow 8.1% year on year, improving from the 4% increase it recorded in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Yum China has missed Wall Street’s revenue estimates multiple times over the last two years.

Looking at Yum China’s peers in the restaurants segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Domino's delivered year-on-year revenue growth of 4.3%, beating analysts’ expectations by 1.2%, and The Cheesecake Factory reported revenues up 7.7%, topping estimates by 2.9%. Domino's traded up 1.3% following the results.

Read our full analysis of Domino’s results here and The Cheesecake Factory’s results here.

Investors in the restaurants segment have had steady hands going into earnings, with share prices flat over the last month. Yum China is up 11.5% during the same time and is heading into earnings with an average analyst price target of $61.34 (compared to the current share price of $45.54).

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