Certain metrics fell in the latest quarter, but the company is promising some good things for the year.Shares of restaurant company Yum China (YUMC -6.42%) -- parent company of KFC, Pizza Hut, and more in China -- dropped on Tuesday after it reported financial results for the first quarter of 2024. The company grew sales by opening new restaurants, but sales at existing restaurants fell, which was not something investors cared for. As of 10 a.m. ET, Yum China stock was down 6%, but it had been down 10% earl ...

Financial Data and Key Metrics Changes - System sales grew 6% year-over-year, following a 17% growth last year [6][22] - Revenue reached an all-time high of US$3 billion in the quarter [6] - Core operating profit improved to US$396 million from US$392 million last year [6][22] - Adjusted operating profit was the second highest in 30 quarters since the spin-off [6] - Diluted EPS grew 10% year-over-year to $0.71 [27] Business Line Data and Key Metrics Changes - KFC system sales increased 7% year-over-year, with 307 net new stores added [23] - KFC same-store sales were at 98% of prior year levels, with 4% same-store traffic growth [23] - Pizza Hut system sales increased 4% year-over-year, with 113 net new stores added [24] - Pizza Hut same-store sales were at 95% of prior year levels, driven by strong traffic growth of 8% [24] Market Data and Key Metrics Changes - Two-thirds of new store openings were in smaller store formats [9] - KFC's delivery sales grew by 14%, maintaining consistent growth over the past decade [36] - Sales at shopping malls surpassed 2019 levels, indicating robust trading [35] Company Strategy and Development Direction - The company aims to open 1,500 to 1,700 net new stores in 2024, focusing on strategic locations [29] - The flexible store models and franchise partnerships are key to capitalizing on opportunities in lower-tier cities [9] - The company is committed to enhancing operational efficiency through initiatives like Project Fresh Eye [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted that competition remains intense but is viewed positively as it drives industry growth [50] - The company anticipates a challenging second quarter due to high base comparisons from last year [28] - Management emphasized the importance of adapting to consumer behavior and maintaining a balanced approach to pricing and product offerings [34][39] Other Important Information - The company returned a record US$745 million to shareholders in the first quarter through share repurchases and dividends [29] - The effective tax rate was 26.9% in the first quarter, lower than the previous year due to fewer non-tax deductible expenses [27] Q&A Session Summary Question: Insights on same-store sales and consumption trends - Management highlighted robust transaction growth during the Chinese New Year and noted that consumers are responding well to both high-ticket and lower-ticket items [33][34] Question: Traffic growth sources - Management indicated that traffic growth is coming from both new customers and increased frequency from existing customers, with a focus on value for money [41][42] Question: Competitive environment and promotional intensity - Management acknowledged that competition has intensified but emphasized the importance of evolving with competitors and maintaining a consistent strategy [50][51] Question: Cost of goods sold and food cost outlook - Management noted that food costs have increased due to promotional activities but expect favorable commodity prices to help manage costs moving forward [60][61] Question: Delivery services resilience post-COVID - Management confirmed that delivery sales have remained strong and are focusing on smaller order sizes to enhance growth in this segment [66]

First Quarter 2024 Results 30 April 2024 NYSE: YUMC and HKEX: 9987 Cautionary Statement Thispresentationcontains“forward-lookingstatements”withinthemeaningofSection27AoftheSecuritiesActof1933andSection21EoftheSecurities ExchangeActof1934.Weintendallforward-lookingstatementstobecoveredbythesafeharborprovisionsofthePrivateSecuritiesLitigationReformAct of1995..Forward-lookingstatementsgenerallycanbeidentifiedbythefactthattheydonotrelatestrictlytohistoricalorcurrentfactsandbytheuseof forward-looking words such ...

For the quarter ended March 2024, Yum China Holdings (YUMC) reported revenue of $2.96 billion, up 1.4% over the same period last year. EPS came in at $0.71, compared to $0.69 in the year-ago quarter.The reported revenue represents a surprise of +0.64% over the Zacks Consensus Estimate of $2.94 billion. With the consensus EPS estimate being $0.66, the EPS surprise was +7.58%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ...

Financial Performance - Total revenues reached $2.96 billion, a 1% increase year over year; excluding foreign currency effects, revenues would have increased by 7%[2] - Operating profit was $374 million, with core operating profit growing 1% year over year to $396 million[2] - Diluted EPS rose by 4% year over year to $0.71, or 10% excluding foreign currency effects[2] - Net income for Yum China Holdings, Inc. was $287 million, a decrease of 1% compared to $289 million in Q1 2023[20] - The effective tax rate improved to 26.9%, down from 28.5% in the previous year, reflecting a 1.6 percentage point decrease[20] - Adjusted Operating Profit for Q1 2024 is $374 million, down 11% from $419 million in Q1 2023[46] - Core Operating Profit for Q1 2024 is $396 million, a 1% increase from $392 million in Q1 2023[46] - Basic Earnings Per Common Share for Q1 2024 is $0.72, compared to $0.70 in Q1 2023[41] - Adjusted EBITDA for Q1 2024 is $495 million, down from $539 million in Q1 2023[41] Sales and Growth - Total system sales increased by 6% year over year, with a net new unit contribution of 8%[2] - KFC opened 307 net new stores, more than double the previous year's openings, contributing to a 7% system sales growth[6] - Pizza Hut opened 113 net new stores, a 40% increase from the prior year, with system sales growing by 4%[9] - Company sales for KFC were $2,193 million, up 1% from $2,166 million in the same quarter last year[21] - Total revenues for Q1 2024 reached $2,958 million, a 1% increase from $2,917 million in Q1 2023[20] Profit Margins - Operating profit margin was 12.6%, down from 14.3% in the prior year, primarily due to increased costs[4] - The restaurant margin for KFC decreased to 19.3%, down from 22.2% in Q1 2023, reflecting a 2.9 percentage point decline[21] - Core OP margin decreased to 12.7% in Q1 2024 from 13.5% in Q1 2023, a decline of 0.8 percentage points[46] - The restaurant profit for the quarter was $493 million, with a restaurant margin of 17.6%[51] - The restaurant margin for KFC was 19.3%, while Pizza Hut's margin was 12.5%[51] Shareholder Returns - Yum China returned approximately $745 million to shareholders, the highest quarterly return in the company's history[2] - The company plans to open approximately 1,500 to 1,700 net new stores in 2024 and return a record $1.5 billion to shareholders[11] - The company repurchased $679 million worth of common stock during the quarter, significantly higher than the $60 million repurchased in the same quarter of the previous year[27] Assets and Liabilities - Total assets decreased from $12,031 million on December 31, 2023, to $11,295 million on March 31, 2024, a decline of approximately 6.1%[25] - Total current liabilities decreased from $2,422 million on December 31, 2023, to $2,263 million on March 31, 2024, a reduction of approximately 6.6%[25] - The company’s equity decreased from $7,106 million on December 31, 2023, to $6,575 million on March 31, 2024, a decline of approximately 7.5%[25] Cash Flow - Net cash provided by operating activities was $442 million for the quarter, compared to $507 million for the same period last year, reflecting a decrease of about 12.8%[27] - Cash, cash equivalents, and restricted cash decreased from $1,128 million at the beginning of the period to $883 million at the end of the period[27] Franchise and Other Revenues - Franchise fees and income for the company totaled $25 million, a 2% increase from $25 million in Q1 2023[20] - Other revenues increased by 18% to $32 million, compared to $27 million in the same quarter last year[20] - The company reported a decrease in other revenues, resulting in a net impact of $(157) million[51]

Yum China Holdings (YUMC) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.The power of a c ...

Analysts on Wall Street project that Yum China Holdings (YUMC) will announce quarterly earnings of $0.66 per share in its forthcoming report, representing a decline of 4.4% year over year. Revenues are projected to reach $2.94 billion, increasing 0.8% from the same quarter last year.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Prior to a company's e ...

SHANGHAI, April 11, 2024 /PRNewswire/ -- Joey Wat, Chief Executive Officer of Yum China Holdings, Inc. (the "Company" or "Yum China", NYSE: YUMC and HKEX: 9987) released her annual letter to stockholders today together with the Company's 2023 Annual Report. The letter recapped Yum China's strong 2023 results, the Company's enduring commitment to stockholder return, as well as its pioneering innovation capabilities and ambitious plans for continued expansion. "2023 was a landmark year for Yum China, one of o ...

SHANGHAI, April 10, 2024 /PRNewswire/ -- Yum China Holdings, Inc. (NYSE: YUMC and HKEX: 9987, "Yum China" or the "Company") today announced that it has published its seventh annual Sustainability Report. The report outlines the Company's achievements and ongoing progress towards its Environmental, Social and Governance (ESG) goals in four focus areas: Environment, Food, People, and Community.                  Key highlights from the report include: In 2023, the Company inaugurated the first 100% renewable ...

Shares of Yum China Holdings, Inc. (YUMC) has declined 37.8% in the past year against the industry’s growth of 4.3%.Despite the fall, the stock is likely to take a U-turn due robust growth plan. This Zacks Rank #2 (Buy) company’s earnings in 2024 and 2025 are estimated to witness growth of 9.5% and 16.3%, respectively.Growth DriversYUMC remains steadfast in its focus on long-term growth, continuously aligning its strategies with a forward-looking vision. On Sep 14, 2023, management unveiled an enhanced RGM ...