Yum China (YUMC) Fell Despite Reporting Solid Quarterly Financial Results

Core Insights - Loomis Sayles Global Growth Fund achieved a return of 16.61% in Q2 2025, outperforming the MSCI ACWI Index Net which returned 11.53% [1] - The fund focuses on investing in high-quality businesses with sustainable competitive advantages, particularly those trading at a significant discount to intrinsic value [1] Company Overview: Yum China Holdings, Inc. - Yum China is the largest restaurant company in China, operating over 16,000 restaurants primarily under the KFC and Pizza Hut brands [3] - As of September 29, 2025, Yum China shares closed at $43.61, with a market capitalization of $15.866 billion [2] - The company reported a one-month return of -0.09% and a 52-week decline of 7.90% [2] Financial Performance - Yum China reported better-than-expected same-store sales growth and restaurant margins, alongside record net new store openings [3] - Despite solid quarterly results, unit growth was slower than anticipated, and revenues and profitability fell below expectations [3] - The company is successfully navigating a challenging consumer spending environment while expanding into lower-tier cities [3] Strategic Positioning - Yum China has over 540 million loyalty members, allowing it to innovate and sustain consumer purchases [3] - The company offers a range of food options catering to both value-conscious consumers and those seeking premium products [3] - With its established brands and supply chain expertise, Yum China is well-positioned to benefit from the growth of consumer spending on restaurants in China [3]