YUM CHINA(US:YUMC) ZACKS·2025-02-07 15:31Core Insights - Yum China Holdings, Inc. (YUMC) reported fourth-quarter 2024 results with earnings exceeding expectations but revenues falling short, showing year-over-year growth in both metrics [1][3]. Financial Performance - Adjusted earnings per share (EPS) for Q4 were 30 cents, beating the Zacks Consensus Estimate of 29 cents by 3.5%, and reflecting a 20% increase year-over-year [3]. - Total revenues reached $2,595 million, missing the consensus estimate of $2,638 million, but still showing a 4% year-over-year increase [3]. - Total costs and expenses were $2.44 billion, slightly below the expected $2.51 billion, while the restaurant margin improved to 12.3%, up 160 basis points year-over-year [5]. - Adjusted net income was $115 million, compared to $103 million in the prior-year quarter, aligning closely with the estimate of $114.1 million [6]. Operational Highlights - Total system sales, excluding foreign currency translation, increased by 4% year-over-year, driven by a net new unit contribution of 5% [4]. - Same-store sales reached 99% of the previous year's level, with same-store transactions growing by 4% year-over-year [4]. - Yum China opened 534 net new stores in Q4, bringing the total restaurant count to 16,395 [9]. Shareholder Returns - The company announced a 50% increase in its cash dividend to 24 cents per share, scheduled for payment on March 27, 2025 [8]. - Yum China aims to return $4.5 billion to shareholders between 2024 and 2026, having delivered a record $1.5 billion in returns in 2024 [7]. Future Outlook - Yum China expects to open between 1,600 and 1,800 net new stores in 2025, with capital expenditures projected to be between $700 million and $800 million [11]. - The company anticipates a steady increase in the proportion of net new franchised stores, targeting 40-50% for KFC and 20-30% for Pizza Hut in the coming years [10].