23 November 2024
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Market + Management

Yum China: Reports Second Quarter 2024 Results

Shanghai / CN. (yb) Yum China Holdings Inc. reported unaudited results for the second quarter ended June 30 (Q2-2024). Second Quarter Highlights:

  • Total system sales grew 4 percent 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 percent of net new unit contribution.
  • 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 percent, were opened by franchisees.
  • Total revenues increased 1 percent YoY to USD 2.68 billion, a record-high for the second quarter. Excluding F/X, total revenues would have been USD 85 million higher, or a 4 percent increase YoY.
  • Same-store sales reached 96 percent of the prior year’s level. Same-store transactions grew 4 percent YoY.
  • Operating profit grew 4 percent YoY to USD 266 million, a record level for the second quarter. Excluding F/X, operating profit would have been USD 9 million higher, or a 7 percent increase YoY. Core operating profit grew 12 percent YoY to USD 275 million.
  • OP Margin was 9.9 percent, an increase of 20 basis points YoY, supported by resilient restaurant margins and savings in G+A expenses.
  • Restaurant margin was 15.5 percent. Excluding USD 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 percent YoY to USD 0.55, a record level for the second quarter, or up 19 percent YoY excluding F/X.
  • Delivery sales grew 11 percent YoY, maintaining the double-digit growth Yum China has carried over the past decade. Delivery contributed approximately 38 percent of KFC and Pizza Hut’s Company sales.
  • Digital sales reached USD 2.2 billion, with digital ordering accounting for approximately 90 percent of total Company sales.
  • Total membership of KFC and Pizza Hut exceeded 495 million. Member sales accounted for over 65 percent of KFC and Pizza Hut’s system sales in aggregate.
  • Yum China returned USD 249 million to shareholders in the second quarter through share repurchases and cash dividends. Year to date, the Company has returned nearly USD 1 billion to shareholders, exceeding its full-year 2023 returns.

CEO Joey Wat: «We achieved our most profitable second quarter since the spin-off, with core operating profit growing by 12 percent despite challenging industry dynamics. Our sharp focus on value-for-money and innovative new products worked well, driving robust same-store transaction growth. We took actions to improve efficiency, stabilizing restaurant margin and expanding OP margin year over year.

«By reducing the complexity of menus and operations, and harnessing the power of automation and AI, we improved operational efficiency. These measures gave us the flexibility to invest in menu innovation and compete on value. KFC has successfully gained market share on delivery platforms by expanding its price range and lowering delivery fees. Pizza Hut attracted value-conscious customers with its entry-price pizzas and solo diners with its Pizza Dough Burger. Our business model breakthroughs enabled us to broaden our addressable market and capture more customer occasions. Our side-by-side KCoffee cafe and Pizza Hut WOW store model delivered incremental sales and showed great future potential. Our new stores maintained good returns, with a consistent payback period of 2 years for KFC and an improved level of 2 to 3 years for Pizza Hut. With our industry-leading capabilities and scale, we are turning challenges to our competitive advantage. We believe that we are well positioned to capture the long-term growth opportunities in China and, ultimately, create enduring value for our shareholders.»

For additional information please read the Company’s PDF file below (253 KB):

20240806-YUM-CHINA-Q22024.


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