(Yicai Global) Sept. 16 -- Shares in Yum China Holding dived after the operator of the Kentucky Fried Chicken, Pizza Hut and Taco Bell chains in China said it is expecting gross profit in the third quarter to plummet by up to 60 percent from the same period last year as the latest outbreak of Covid-19 hammers sales.

Yum China’s Hong Kong share price [HKG:9987] finished the day down 2.19 percent at HKD446 (USD57). The stock has dropped 7.9 percent since the news broke on Sept. 14. In New York, shares [NYSE:YUMC] closed down 5.91 percent yesterday at USD57.60.

The pandemic has led to substantially lower travel volume, the cancellation of summer holiday trips and fewer social activities, all of which has significantly impacted the restaurant industry, the Shanghai-based firm said on Sept. 14. On top of this there have been rising costs and wages.

More than 500 of Yum's stores were closed last month, or only offered takeout services, and same-store sales were down around 20 percent year on year. Sales should recover but it will take time, the firm said. The company is planning an aggressive expansion and will open 1,300 new outlets by the end of the year.

Editor: Kim Taylor