(Yicai Global) Nov. 3 -- Shares of Yum China Holdings plunged after the operator of Kentucky Fried Chicken and Pizza Hut restaurants in China reported a decline in net profit in the first three quarters of the year, despite the positive performance in the third quarter.

Yum China [HKG: 9987] was trading down 4.2 percent at HKD373.40 (USD47.57) as of 2.40 p.m. today, after earlier plunging as much as 10.2 percent.

Net profit was USD389 million in the nine months ended Sept. 30, down 25 percent from a year earlier, according to the latest financial results the Shanghai-based company released yesterday. Revenue fell 1 percent to USD7.5 billion.

In the third quarter, Yum China reported a 98 percent jump in net profit to USD206 million and a 5 percent gain in revenue to USD2.7 billion from the same period last year.

The positive results in the third quarter are mainly due to Yum China’s resilient business model and agility that helped the company to effectively manage the negative impact of Covid-19, Chief Executive Officer Joey Wat said.

But the external environment remains challenging, Yum China noted. Covid-19 prevention and control measures escalated in October. Downward pressure on the economy, cautious consumer spending, and the inflationary environment are other factors that continue to affect Yum China’s performance.

With the unpredictable epidemic situation, delivery continued to be a popular option, while dine-in consumption remained low. Delivery contributed around 38 percent of KFC and Pizza Hut’s sales in the third quarter, up 4 percentage points from a year earlier. Digital orders, including delivery, and mobile and kiosk orders, accounted for about 91 percent of the two restaurant chains’ sales.

Yum China plans to develop its coffee business into an important growth engine. The firm is also on track to meet its full-year net new store target of between 1,000 to 1,200. It opened 239 net new stores in the three months ended Sept. 30 to reach a total store count of 12,409.

Editor: Futura Costaglione