SHANGHAI, China – On November 4, 2024, Yum China Holdings, Inc. reported unaudited results for the third quarter ended September 30, 2024. Yum China is the largest restaurant company in China. It has approximately 400,000 employees and operates over 15,000 restaurants under six brands across around 2,200 cities in China. KFC and Pizza Hut are the leading brands in the quick-service and casual dining restaurant spaces in China, respectively. In addition, Yum China has partnered with Lavazza to develop the Lavazza coffee concept in China.
Yum China Holdings: Third Quarter Highlights:
- Total system sales grew 4% year over year (“YoY”), excluding foreign currency translation (“F/X”). The growth was primarily attributable to 7% of net new unit contribution.2
- Total store count reached 15,861 as of September 30, 2024, including 11,283 KFC stores and 3,606 Pizza Hut stores. The Company opened 438 net new stores in the third quarter. 145 net new stores, or 33%, were opened by franchisees.
- Total revenues increased 5% YoY to $3.07 billion, an all-time quarter high (a 4% increase excluding F/X).
- Delivery sales grew 18% YoY, maintaining the double-digit annual growth Yum China has sustained over the past decade. Delivery contributed approximately 40% of KFC and Pizza Hut’s Company sales.
- Same-store sales reached 97% of the prior year’s level, improved from 96% in the second quarter. Same-store transactions grew 1% YoY, the seventh consecutive quarter of growth.
- Operating profit grew 15% YoY to $371 million (a 14% increase excluding F/X). Core operating profit1 grew 18% YoY.
- OP margin3 was 12.1%, an increase of 100 basis points YoY, supported by resilient restaurant margins and savings in G&A expenses.
- Restaurant margin was 17.0%, steady YoY. Excluding $15 million in items affecting comparability, restaurant margin increased by 50 basis points YoY, driven by improved operational efficiencies.
- Diluted EPS increased 33% YoY to $0.77 (a 32% increase excluding F/X). Excluding the impact of the mark-to-market equity investments in the third quarter of 2024 and 2023, Diluted EPS increased 19% YoY.
- Digital sales4 reached $2.61 billion, with digital ordering accounting for approximately 90% of total Company sales.
- Total membership of KFC and Pizza Hut exceeded 510 million. Member sales accounted for approximately 64% of KFC and Pizza Hut’s system sales in aggregate.
- Yum China returned $248 million to shareholders in the third quarter, through $187 million in share repurchases and $61 million in cash dividends. In the first nine months, the Company returned $1.24 billion to shareholders, nearly three times the amount returned in the same period last year.
Joey Wat, CEO of Yum China, commented, “We delivered strong results again in the third quarter. Operating profit increased by 15%, core operating profit grew 18%, and diluted EPS increased by 33%. OP margin expanded by 100 basis points, and restaurant margin improved year-over-year on a comparable basis. We also achieved seven consecutive quarters of same-store transaction growth and decade-long double-digit delivery sales growth. Our RGM 2.0 strategy is executing effectively, with a dual focus on operational efficiency and innovation. Savings generated from improved efficiency allowed us to reinvest in food innovation and our value-for-money offerings, driving incremental traffic to our stores. Same-store sales index improved sequentially for both KFC and Pizza Hut. These results demonstrate the effectiveness of our strategy and our ability to outperform in a challenging and fluid environment.”
