Yum China Reports Fourth Quarter Results and Increases Dividend by 50%

Core Insights - Yum China reported a strong fourth quarter with a 36% increase in operating profit and a 140 basis point expansion in operating profit margin [1][6] - The company achieved record results for 2024, with total revenues reaching $11 billion and a net addition of 1,751 stores [1][8] - The CEO highlighted the effectiveness of operational efficiency and innovation strategies, contributing to sustained growth in sales and profitability [6][8] Fourth Quarter Highlights - Total revenues for the fourth quarter increased by 4% year-over-year to $2.6 billion, marking a record high for the quarter [8] - Same-store sales improved to 99% of the prior year's level, with same-store transactions growing by 4% [8][9] - Operating profit for the fourth quarter was $151 million, a 36% increase year-over-year, with an operating profit margin of 5.8% [8][9] Full Year Highlights - For the full year, operating profit rose by 5% to $1.2 billion, with core operating profit increasing by 12% [1][8] - Diluted earnings per share (EPS) increased by 18% to $2.33, a record high for the year [8][9] - The company returned $1.5 billion to shareholders in 2024 through dividends and share repurchases, representing approximately 8% of outstanding shares [11][12] KFC Performance - KFC system sales grew by 5% year-over-year, with same-store sales reaching 99% of the prior year's level [16][23] - The brand opened a record 1,352 net new stores in 2024, with a total store count of 11,648 [16][23] - Operating profit for KFC increased by 15% year-over-year, with an operating profit margin of 9.9% [16][23] Pizza Hut Performance - Pizza Hut system sales grew by 3% year-over-year, with same-store sales reaching 98% of the prior year's level [23][32] - The brand opened a record 412 net new stores in 2024, bringing the total store count to 3,724 [23][32] - Operating profit for Pizza Hut grew by 156% year-over-year, with an operating profit margin of 2.6% [23][32] Future Outlook - The company plans to return a total of $3 billion to shareholders from 2025 through 2026, in addition to the $1.5 billion returned in 2024 [12][23] - Yum China aims to achieve a store count of 20,000 by 2026, with a focus on expanding through both company-owned and franchise stores [6][12] - The company anticipates an increase in the franchise mix of net new stores over the next few years [23][32]