SHANGHAI, China – Yum China Holdings, Inc. yesterday reported unaudited results for the second quarter ended June 30, 2023. Total revenues increased 25% year over year to $2.65 billion from $2.13 billion (a 32% increase excluding foreign currency translation (“F/X”)).
Total system sales increased 32% year over year, with increases of 32% at KFC and 30% at Pizza Hut, excluding F/X. Growth was mainly attributable to same-store sales, new unit contribution and lapping of temporary store closures in the prior year.
Same-store sales increased 15% year over year, with increases of 15% at KFC and 13% at Pizza Hut, excluding F/X.
Yum China opened 422 net new stores during the quarter; total store count reached 13,602, as of June 30, 2023.
Operating Profit increased 216% year over year to $257 million from $81 million (a 228% increase excluding F/X), primarily driven by sales leveraging and margin expansion.
Adjusted Operating Profit increased 215% year over year to $259 million from $82 million (a 227% increase excluding F/X).
Restaurant margin was 16.1%, compared with 12.1% in the prior year period. Effective tax rate was 24.7%.
Net Income increased 138% to $197 million from $83 million in the prior year period, primarily due to the increase in Operating Profit.
Adjusted Net Income increased 137% to $199 million from $84 million in the prior year period (a 207% increase excluding the net loss of $9 million in the second quarter of 2023 and net gain of $16 million in the second quarter of 2022, from the mark-to-market equity investment in Meituan; a 219% increase if further excluding F/X).
Diluted EPS increased 135% to $0.47 from $0.20 in the prior year period.
Adjusted Diluted EPS increased 135% to $0.47 from $0.20 in the prior year period (a 206% increase excluding the net loss from the mark-to-market equity investments in the second quarter of 2023 and net gain in the second quarter of 2022; a 219% increase if further excluding F/X).
Yum China Holdings: 2023 Outlook
The Company’s fiscal year 2023 targets remain unchanged:
- To open approximately 1,100 to 1,300 net new stores.
- To make capital expenditures in the range of approximately $700 million to $900 million.
Company Updates
On July 17, 2023, the Company announced the appointment of Mr. David Hoffmann to the Board of the Directors. With this appointment, the Board is now comprised of 10 directors, nine of whom are independent.
