Core Viewpoint - Yum China is employing a "balancing act" strategy to navigate the intense competition in the food delivery market while maintaining sales growth and profit improvement [1][3]. Financial Performance - In Q2, Yum China's total revenue increased by 4% year-on-year, reaching $2.8 billion, while operating profit grew by 14% to $304 million, marking a new high for the second quarter [18]. - Same-store sales rose by 1%, driven by a 2% increase in same-store transaction volume, achieving positive growth for the first time since Q1 2024 [1][21]. - For the first half of the year, total revenue was $5.768 billion, a 2% increase, and operating profit rose by 10% to $703 million [18]. Delivery Business Growth - Yum China's delivery sales grew significantly, with a 17% year-on-year increase in the first half of the year, including an 18% increase for KFC and a 14% increase for Pizza Hut [4]. - Delivery accounted for approximately 45% of the company's restaurant revenue in Q2, up 7 percentage points year-on-year [4]. - The company has a strategy to balance delivery growth with profit margins, focusing on maintaining pricing integrity while expanding sales [7][12]. Cost Management - Rising delivery sales have led to increased rider costs, which the company is managing by optimizing operations and controlling non-rider costs [9][11]. - In Q2, salaries and employee benefits accounted for 27.2% of sales, up 0.9 percentage points year-on-year, primarily due to increased rider costs [9]. - Despite the challenges, both KFC and Pizza Hut maintained profit margins through streamlined operations and favorable raw material prices [9][18]. Store Expansion Strategy - Yum China added 583 new stores in the first half of the year, bringing the total to 16,978, with KFC contributing 590 new stores and Pizza Hut adding 140 [19]. - The company plans to maintain its target of adding 1,600 to 1,800 new stores in 2025, with a focus on increasing the proportion of franchise stores [24][26]. Future Outlook - The company expects to achieve mid-single-digit growth in system sales for the year, despite a complex macro environment [23]. - Yum China is confident in its ability to meet its annual targets for new store openings and sales growth, supported by a series of new initiatives [28].
百胜中国中报出炉，CEO说外卖大战底线是绝不会“buy sales”，有信心全年净新增1600至1800家店