2025-11-10 11:04Financial Performance - Net income for the quarter ended September 30, 2025, was $305 million, a decrease of 4.4% compared to $319 million for the same quarter in 2024[9] - Comprehensive income for the quarter was $335 million, down from $486 million in the prior year, reflecting a decline of 30.9%[9] - Year-to-date net income as of September 30, 2025, totaled $851 million, slightly lower than $854 million for the same period in 2024[11] - Company sales for the quarter ended September 30, 2025, were $2,998 million, an increase from $2,895 million in the same quarter of 2024, representing a growth of approximately 3.6%[53] - Total revenues for the year to date ended September 30, 2025, reached $9,518 million, compared to $9,166 million for the same period in 2024, indicating a year-over-year increase of about 3.8%[54] - Operating profit for the combined segments (KFC and Pizza Hut) for the quarter ended September 30, 2025, was $400 million, compared to $371 million for the same quarter in 2024[98] - Operating profit for the year to date ended September 30, 2025, was $1,103 million, compared to $1,011 million for the same period in 2024, reflecting an increase of 9.1%[99] Cash Flow and Capital Expenditures - Cash flows from operating activities increased to $1,341 million year-to-date, compared to $1,252 million in the previous year, marking a growth of 7.1%[11] - The company reported capital spending of $385 million year-to-date, down from $523 million in the previous year, a decrease of 26.4%[11] - The excise tax on net share repurchases amounted to $6 million for the year to date ended September 30, 2025, compared to $10 million for the same period in 2024[63] Assets and Liabilities - Total assets decreased to $11,034 million as of September 30, 2025, from $11,121 million at the end of 2024, a decline of 0.8%[12] - Total liabilities slightly decreased to $4,648 million from $4,694 million, reflecting a reduction of 1.0%[12] - Cash and cash equivalents at the end of the period were $648 million, down from $723 million at the beginning of the period, a decrease of 10.4%[12] - The company’s equity decreased to $6,386 million as of September 30, 2025, from $6,414 million at the end of 2024, a decline of 0.4%[12] Share Repurchase and Dividends - The company repurchased shares worth $692 million during the year, compared to $1,057 million in the previous year, a reduction of 34.5%[11] - Cash dividends declared in the third quarter of 2025 were $88 million, equating to $0.24 per common share, compared to $61 million or $0.16 per common share in the same period of 2024[13] - The company repurchased and retired shares amounting to $329 million in the third quarter of 2025, compared to $188 million in the same quarter of 2024, reflecting an increase of approximately 75%[13] Investments and Joint Ventures - The Company has a 65% equity interest in the Lavazza joint venture, which focuses on developing the Lavazza coffee concept in China[21] - The Company invested $14 million in SnowValley Agricultural Group, a key supplier for potatoes, in the first quarter of 2025[40] - The Company reported equity earnings from its investment in Sunner of $5 million for the quarter ended September 30, 2025[33] - The fair value of the Company's investment in Meituan was subject to market fluctuations, with a pre-tax unrealized loss of $11 million for the quarter ended September 30, 2024[38] Store Operations - As of September 30, 2025, the Company operates 12,640 KFC stores and 4,022 Pizza Hut restaurants in China[19][20] - The Company maintains a controlling interest of 58% to 92% in KFC entities across major cities in China[19] Tax and Regulatory Matters - The income tax provision for the quarter ended September 30, 2025, was $114 million, with an effective tax rate of 27.6%, compared to $119 million and 27.3% for the same quarter in 2024[89] - Year-to-date income tax provision for 2025 was $313 million, with an effective tax rate of 27.2%, compared to $309 million and 26.6% in 2024[90] - The company will continue to monitor regulatory developments related to tax reforms, including the OECD's Pillar Two initiative, which introduces a 15% global minimum tax starting January 1, 2024[94] Segment Performance - Revenue from external customers for KFC was $2.404 billion and for Pizza Hut was $635 million for the quarter ended September 30, 2025, totaling $3.206 billion[98] - KFC's revenue from external customers for the year to date ended September 30, 2025, was $6,746 million, up from $6,555 million in 2024, marking an increase of 2.9%[99] - Pizza Hut's revenue from external customers for the year to date ended September 30, 2025, was $1,784 million, compared to $1,750 million in 2024, reflecting a growth of 1.9%[99] Other Financial Metrics - The company reported foreign currency translation adjustments of $30 million in the third quarter of 2025, compared to $167 million in the same quarter of 2024, showing a significant decrease[13] - The provision for accounts receivable was $2 million as of September 30, 2025, compared to $1 million as of December 31, 2024, reflecting an increase in expected credit losses[56] - The company recognized breakage revenue from prepaid stored-value products based on historical redemption patterns, with estimates reviewed annually[44]