2025-08-05 10:02Financial Performance - Total revenues increased 4% YoY to $2.8 billion, with same-store sales growth turning positive at 1%[5] - Operating profit grew 14% YoY to $304 million, achieving a second-quarter record high, with an OP margin of 10.9%, up 100 basis points YoY[5] - Digital sales reached $2.4 billion, accounting for approximately 94% of total Company sales, while delivery sales grew 22% YoY, contributing about 45% of total sales[5] - Diluted EPS increased 5% YoY to $0.58, with a 15% increase when excluding the impact of mark-to-market and foreign exchange[5] - Net income for Yum China Holdings, Inc. was $215 million, a slight increase of 1% from $212 million in the same quarter of 2024[27] - Basic earnings per share rose to $0.58, compared to $0.55 in the same quarter last year[27] - Net income for the year to date ended June 30, 2025, was $546 million, an increase from $535 million in the same period of 2024, reflecting a growth of 2.1%[37] - Adjusted EBITDA for the year-to-date ended June 30, 2025, reached $941 million, up from $894 million in the same period last year, reflecting a 5% increase[53] Store Expansion - KFC opened 295 net new stores during the quarter, bringing the total store count to 12,238, while Pizza Hut opened 95 new stores, reaching 3,864[17] - The Company is targeting approximately 1,600 to 1,800 net new stores in 2025, with a franchise mix of net new stores expected to reach 40-50% for KFC and 20-30% for Pizza Hut[17] - Total unit count for KFC increased to 12,238 as of June 30, 2025, up from 11,648 at the end of 2024, marking a growth of 5.0%[41] - Total unit count for Pizza Hut rose to 3,864, an increase from 3,724, reflecting a growth of 3.8%[42] Membership and Sales - The total membership for KFC and Pizza Hut reached approximately 560 million, up 13% YoY, with member sales accounting for about 64% of system sales[5] - KFC's same-store sales increased 1% YoY, while Pizza Hut's same-store sales grew 2% YoY, with both brands achieving double-digit transaction growth[5][17] - Company sales reached $2,613 million, reflecting a 3% growth compared to $2,528 million in the prior year[27] - Company sales for KFC in Q2 2025 were $2,059 million, while Pizza Hut generated $545 million in sales[56] Costs and Expenses - Total costs and expenses for the quarter were $2,483 million, a 3% increase from $2,413 million in the prior year[27] - Total costs and expenses for the quarter were $1,804 million, a 3% increase from $1,750 million in the same quarter of 2024[29] - General and administrative expenses for the quarter ended June 30, 2024, were $133 million, while for the year-to-date period they totaled $269 million[57][58] - Total costs and expenses, net, were $4,997 million, leading to a net operating profit of $640 million[59] Shareholder Returns and Capital Expenditures - The Company plans to return $3 billion to shareholders in 2025 through 2026, in addition to the $1.5 billion returned in 2024[12] - Capital expenditures for the 2025 fiscal year are projected to be approximately $600 million to $700 million, revised down from the initial target of $700 million to $800 million[17] Cash Flow and Assets - Cash and cash equivalents decreased to $592 million from $723 million at the end of 2024[34] - Total assets as of June 30, 2025, were $10,983 million, down from $11,121 million at the end of 2024[34] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $131 million for the period, compared to a decrease of $85 million in the previous year[37] - The company’s cash, cash equivalents, and restricted cash at the end of the period stood at $592 million, down from $1,043 million a year earlier, a decline of 43.3%[37] Tax and Franchise Income - The effective tax rate for the quarter was 25.8%, up from 25.2% in the previous year[27] - Franchise fees and income increased by 11% to $24 million from $22 million year-over-year[27] - Revenues from transactions with franchisees grew by 20% to $115 million compared to $96 million in the same quarter of 2024[27]