SHANGHAI, China – Yum China Holdings, Inc. yesterday reported unaudited results for the second quarter ended June 30, 2024. Yum China is the largest restaurant company in China with a mission to make every life taste beautiful. The Company has approximately 400,000 employees and operates over 15,000 restaurants under six brands across more than 2,100 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: Second Quarter Highlights:
- Total system sales grew 4% year over year (“YoY”), excluding foreign currency translation (“F/X”), on top of last year’s high base. The growth was primarily attributable to 8% of net new unit contribution.2
- Total store count reached 15,423 as of June 30, 2024, including 10,931 KFC stores and 3,504 Pizza Hut stores. The Company opened 401 net new stores in the quarter. 99 net new stores, or 25%, were opened by franchisees.
- Total revenues increased 1% YoY to $2.68 billion, a record-high for the second quarter. Excluding F/X, total revenues would have been $85 million higher, or a 4% increase YoY.
- Same-store sales reached 96% of the prior year’s level. Same-store transactions grew 4% YoY.
- Operating profit grew 4% YoY to $266 million, a record level for the second quarter. Excluding F/X, operating profit would have been $9 million higher, or a 7% increase YoY. Core operating profit1 grew 12% YoY to $275 million.
- OP Margin3 was 9.9%, an increase of 20 basis points YoY, supported by resilient restaurant margins and savings in G&A expenses.
- Restaurant margin was 15.5%. Excluding $12 million in items affecting comparability, restaurant margin was approximately the same as the second quarter last year. Improvement in operational efficiencies supported margin stability.
- Diluted EPS increased 17% YoY to $0.55, a record level for the second quarter, or up 19% YoY excluding F/X.
- Delivery sales grew 11% YoY, maintaining the double-digit growth Yum China has carried over the past decade. Delivery contributed approximately 38% of KFC and Pizza Hut’s Company sales.
- Digital sales4 reached $2.2 billion, with digital ordering accounting for approximately 90% of total Company sales.
- Total membership of KFC and Pizza Hut exceeded 495 million. Member sales accounted for over 65% of KFC and Pizza Hut’s system sales in aggregate.
- Yum China returned $249 million to shareholders in the second quarter through share repurchases and cash dividends. Year to date, the Company has returned nearly $1 billion to shareholders, exceeding its full-year 2023 returns.
Outlook
The Company’s targets for the 2024 fiscal year remain unchanged from the prior period’s disclosures.
- Open approximately 1,500 to 1,700 net new stores.
- Make capital expenditures in the range of approximately $700 million to $850 million.
- Return a Company record-setting $1.5 billion to shareholders through quarterly cash dividends and share repurchases.
