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Yum! closes 7,000 restaurants due to COVID-19 | 2020-03-26

Yum! closes 7,000 restaurants due to COVID-19 | 2020-03-26
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LOUISVILLE, KY. — Yum! Brands, Inc. has closed more than 7,000 restaurants worldwide as a result of the COVID-19 pandemic. The closings are a direct response to travel restrictions and social distancing guidelines imposed by governments of countries affected by the pandemic.

“As we have taken steps in response to the pandemic, our primary focus continues to be the safety of everyone who engages with our brands, including our employees, franchisees and their team members, and customers,” Yum! Brands said in a March 24 filing with the US Securities and Exchange Commission. “At the same time, we understand the important role our restaurants can play in continuing to serve customers in markets that will or have experienced restrictions around travel outside the home or the gathering of individuals, particularly given our existing drive-thru, carryout and delivery channels.”

The closings include more than 1,000 Pizza Huts in the United States and over 900 KFCs in the United Kingdom. Stores in the United States that remain open are limited to drive-thru, delivery and carryout options.

“The impact on our sales within a market has depended upon the severity and duration of the outbreak, as well as that market’s reliance on dine-in sales,” Yum! Brands said. “Importantly, we have seen early signs of sales recovery in markets that were first impacted by COVID-19, although there can be no assurance of continued improvement.”

Yum! Brands said it now estimates same-store sales for the quarter ended March 31 will decline in a range of mid- to high-single digits.

“Because this situation is ongoing and because the duration and severity are unclear it is difficult to forecast any impacts on the company’s future results,” the company noted in the filing.” However, we currently expect COVID-19 to impact our same-store sales for the quarter ended June 30, 2020, more significantly than it is impacting the current quarter due to the increasing number of markets currently impacted.”

Also in the filing, Yum! Brands announced its intent to suspend its previously announced share repurchase program. As part of the program, the company’s board of directors has authorized repurchases of up to $2 billion of Yum! Brands common stock through June 30, 2021.

Yum! Brands said the decision to suspend the share repurchase program reflects the company’s intent to maintain flexibility and focus on continued investment in serving customers, the health and well-being of employees and supporting franchisees.

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