STOCK TITAN

Yum China Reports Third Quarter Results

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags

Yum China (YUMC) reported strong Q3 2024 results with total revenues increasing 5% YoY to $3.07 billion. Operating profit grew 15% to $371 million, while diluted EPS rose 33% to $0.77. The company expanded its store network to 15,861 locations, including 11,283 KFC and 3,606 Pizza Hut stores, adding 438 net new stores in Q3. Digital sales reached $2.61 billion, accounting for 90% of total Company sales. The company plans to increase capital returns to shareholders from $3 billion to $4.5 billion between 2024-2026. Same-store sales reached 97% of prior year's level, with same-store transactions growing 1% YoY for the seventh consecutive quarter.

Yum China (YUMC) ha riportato risultati solidi per il terzo trimestre del 2024, con ricavi totali aumentati del 5% rispetto all'anno precedente, raggiungendo $3,07 miliardi. L'utile operativo è cresciuto del 15% a $371 milioni, mentre l'EPS diluito è aumentato del 33% a $0,77. L'azienda ha ampliato la sua rete di negozi a 15.861 locations, incluse 11.283 KFC e 3.606 Pizza Hut, aggiungendo 438 nuovi negozi netti nel terzo trimestre. Le vendite digitali hanno raggiunto $2,61 miliardi, rappresentando il 90% delle vendite totali della società. L'azienda prevede di aumentare i ritorni di capitale per gli azionisti da $3 miliardi a $4,5 miliardi tra il 2024 e il 2026. Le vendite nei negozi comparabili hanno raggiunto il 97% del livello dell'anno precedente, con le transazioni nei negozi comparabili in crescita dell'1% anno su anno per il settimo trimestre consecutivo.

Yum China (YUMC) reportó resultados sólidos para el tercer trimestre de 2024, con ingresos totales que aumentaron un 5% interanual a $3.07 mil millones. El beneficio operativo creció un 15% a $371 millones, mientras que el EPS diluido aumentó un 33% a $0.77. La compañía amplió su red de tiendas a 15,861 ubicaciones, incluyendo 11,283 KFC y 3,606 Pizza Hut, añadiendo 438 nuevas tiendas netas en el tercer trimestre. Las ventas digitales alcanzaron los $2.61 mil millones, representando el 90% de las ventas totales de la empresa. La compañía planea aumentar los retornos de capital a los accionistas de $3 mil millones a $4.5 mil millones entre 2024 y 2026. Las ventas en tiendas comparables alcanzaron el 97% del nivel del año anterior, con las transacciones en tiendas comparables creciendo un 1% interanual durante el séptimo trimestre consecutivo.

Yum China (YUMC)는 2024년 3분기 강력한 실적을 발표하며 총 수익이 전년 대비 5% 증가한 30억 7천만 달러에 이르렀습니다. 운영 이익은 15% 증가하여 3억 7천1백만 달러에 달했고, 희석 주당순이익(EPS)은 33% 상승하여 0.77달러를 기록했습니다. 이 회사는 15,861개 매장으로 매장 네트를 확장했으며, 여기에는 11,283개의 KFC와 3,606개의 Pizza Hut 매장이 포함되어 있으며, 3분기에 순 신규 매장 438개를 추가했습니다. 디지털 판매는 26억 1천만 달러에 달하며, 회사 총 매출의 90%를 차지했습니다. 이 회사는 2024년부터 2026년 사이 주주들에게의 자본 환원을 30억 달러에서 45억 달러로 늘릴 계획입니다. 동일 매장 수익은 전년도 수준의 97%에 도달했으며, 동일 매장 거래는 7분기 연속으로 전년 대비 1% 증가했습니다.

Yum China (YUMC) a reporté de solides résultats pour le troisième trimestre 2024, avec des revenus totaux en hausse de 5 % par rapport à l'année précédente, atteignant 3,07 milliards de dollars. Le bénéfice d'exploitation a augmenté de 15 %, s'élevant à 371 millions de dollars, tandis que le BPA dilué a grimpé de 33 % à 0,77 dollar. L'entreprise a élargi son réseau de magasins à 15 861 emplacements, comprenant 11 283 KFC et 3 606 Pizza Hut, ajoutant 438 nouveaux magasins nets au troisième trimestre. Les ventes numériques ont atteint 2,61 milliards de dollars, représentant 90 % du total des ventes de l'entreprise. L'entreprise prévoit d'augmenter les retours de capital aux actionnaires de 3 milliards à 4,5 milliards de dollars entre 2024 et 2026. Les ventes dans les magasins comparables ont atteint 97 % du niveau de l'année précédente, avec des transactions dans les magasins comparables en hausse de 1 % d'une année sur l'autre pour le septième trimestre consécutif.

Yum China (YUMC) hat starke Ergebnisse für das 3. Quartal 2024 gemeldet, mit einem Umsatzanstieg von 5% im Vergleich zum Vorjahr auf 3,07 Milliarden Dollar. Der Betriebsgewinn wuchs um 15% auf 371 Millionen Dollar, während das verwässerte EPS um 33% auf 0,77 Dollar stieg. Das Unternehmen erweiterte sein Filialnetz auf 15.861 Standorte, darunter 11.283 KFC und 3.606 Pizza Hut-Filialen, und fügte im 3. Quartal 438 netto neue Filialen hinzu. Die Digitalverkäufe erreichten 2,61 Milliarden Dollar und machten 90% des Gesamtumsatzes des Unternehmens aus. Das Unternehmen plant, die Kapitalrückflüsse an die Aktionäre von 3 Milliarden auf 4,5 Milliarden Dollar im Zeitraum von 2024 bis 2026 zu erhöhen. Die vergleichbaren Filialverkäufe erreichten 97% des Vorjahresniveaus, wobei die Transaktionen in vergleichbaren Filialen im siebten aufeinanderfolgenden Quartal um 1% im Jahresvergleich anstiegen.

Positive
  • Total revenues reached all-time quarter high of $3.07 billion, up 5% YoY
  • Operating profit increased 15% YoY to $371 million
  • Diluted EPS grew 33% YoY to $0.77
  • Digital sales reached $2.61 billion, representing 90% of total Company sales
  • Increased capital return program by 50% to $4.5 billion for 2024-2026
  • Added 438 net new stores in Q3 2024
Negative
  • Same-store sales declined 3% YoY
  • KFC same-store sales decreased 2% YoY
  • Pizza Hut same-store sales fell 6% YoY

Insights

A strong quarter with impressive financial metrics. Total revenues hit an all-time high of $3.07 billion, with operating profit growing 15% to $371 million. The 33% YoY growth in diluted EPS to $0.77 is particularly noteworthy. The company's aggressive expansion continues with 438 net new stores, bringing the total to 15,861 locations.

Two key strategic shifts stand out: First, the increased focus on franchising, targeting 40-50% franchise mix for KFC and 20-30% for Pizza Hut. Second, the 50% increase in planned capital returns to shareholders to $4.5 billion for 2024-2026 shows strong confidence in cash generation capabilities.

Restaurant margins remain healthy at 17%, with a 50 basis point improvement excluding one-time items. Digital transformation continues to drive growth, with digital sales reaching $2.61 billion and accounting for 90% of company sales.

The company's performance in China's competitive market shows strategic resilience. Same-store sales reached 97% of last year's level, improving from 96% in Q2, with seven consecutive quarters of transaction growth. The delivery business maintains impressive momentum, growing 18% YoY and contributing 40% of KFC and Pizza Hut sales.

Innovation initiatives like KCOFFEE Cafes (500 stores) and Pizza Hut WOW (150 stores) are successfully expanding market reach. The membership program now exceeds 510 million members, driving 64% of system sales, indicating strong customer loyalty and effective digital engagement strategies.

Robust Sales Growth, Margin Expansion and 33% Diluted EPS Growth
Sequential Improvement in Same-Store Sales Index and Seventh Consecutive Quarter of Same-Store Transaction Growth 
Operating Profit Increased by 15% to $371 Million and Core Operating Profit1 Grew 18%
Stepping up Capital Returns to Shareholders by 50% to $4.5 Billion for 2024-2026

SHANGHAI, Nov. 4, 2024 /PRNewswire/ -- Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the third quarter ended September 30, 2024.

Third Quarter Highlights

  • Total system sales grew 4% year over year ("YoY"), excluding foreign currency translation ("F/X"). The growth was primarily attributable to 7% of net new unit contribution.2

  • Total store count reached 15,861 as of September 30, 2024, including 11,283 KFC stores and 3,606 Pizza Hut stores. The Company opened 438 net new stores in the third quarter. 145 net new stores, or 33%, were opened by franchisees.

  • Total revenues increased 5% YoY to $3.07 billion, an all-time quarter high (a 4% increase excluding F/X).

  • Delivery sales grew 18% YoY, maintaining the double-digit annual growth Yum China has sustained over the past decade. Delivery contributed approximately 40% of KFC and Pizza Hut's Company sales.

  • Same-store sales reached 97% of the prior year's level, improved from 96% in the second quarter. Same-store transactions grew 1% YoY, the seventh consecutive quarter of growth.

  • Operating profit grew 15% YoY to $371 million (a 14% increase excluding F/X). Core operating profit1 grew 18% YoY.

  • OP margin3 was 12.1%, an increase of 100 basis points YoY, supported by resilient restaurant margins and savings in G&A expenses.

  • Restaurant margin was 17.0%, steady YoY. Excluding $15 million in items affecting comparability, restaurant margin increased by 50 basis points YoY, driven by improved operational efficiencies.

  • Diluted EPS increased 33% YoY to $0.77 (a 32% increase excluding F/X). Excluding the impact of the mark-to-market equity investments in the third quarter of 2024 and 2023, Diluted EPS increased 19% YoY.

  • Digital sales4 reached $2.61 billion, with digital ordering accounting for approximately 90% of total Company sales.

  • Total membership of KFC and Pizza Hut exceeded 510 million. Member sales accounted for approximately 64% of KFC and Pizza Hut's system sales in aggregate.

  • Yum China returned $248 million to shareholders in the third quarter, through $187 million in share repurchases and $61 million in cash dividends. In the first nine months, the Company returned $1.24 billion to shareholders, nearly three times the amount returned in the same period last year.

Joey Wat, CEO of Yum China, commented, "We delivered strong results again in the third quarter. Operating profit increased by 15%, core operating profit grew 18%, and diluted EPS increased by 33%. OP margin expanded by 100 basis points, and restaurant margin improved year-over-year on a comparable basis. We also achieved seven consecutive quarters of same-store transaction growth and decade-long double-digit delivery sales growth. Our RGM 2.0 strategy is executing effectively, with a dual focus on operational efficiency and innovation. Savings generated from improved efficiency allowed us to reinvest in food innovation and our value-for-money offerings, driving incremental traffic to our stores. Same-store sales index improved sequentially for both KFC and Pizza Hut. These results demonstrate the effectiveness of our strategy and our ability to outperform in a challenging and fluid environment."

Wat added, "We regard both system sales and same-store sales growth as equally important. With these priorities in mind, we continue to drive menu innovations, infusing fresh energy into our flagship products. By optimizing our delivery strategy, we have captured more smaller order transactions and gained market share on aggregator platforms. Our breakthrough business models, side-by-side KCOFFEE Cafes and Pizza Hut WOW, enabled us to broaden our addressable market and capture new customer demand, reaching 500 and 150 stores, respectively."

 Wat concluded, "We see ample opportunities across China to enter underserved markets and enhance customer access. With tailored store models, we are accelerating franchise store openings to unlock additional opportunities. Our franchise strategy focuses on accessing strategic and remote locations as well as lower tier cities previously beyond our reach. We anticipate the franchise mix of net new stores will gradually increase to 40-50% for KFC and 20-30% for Pizza Hut over the next few years. Looking ahead, we are committed to returning excess capital to shareholders as we continue investing in driving business growth. With our confidence in our cash generating capabilities, we plan to step up capital returns to shareholders, increasing from $3 billion to $4.5 billion between 2024 and 2026."

[1] Core operating profit is defined as operating profit adjusted for special items, further excluding items affecting comparability and the impact of F/X. The Company uses core operating profit for the purposes of evaluating the performance of its core operations. Please refer to "Reconciliation of Reported GAAP Results to Non-GAAP Measures" included in the accompanying tables of this release for further details.

[2] Net new unit contribution refers to sales contribution from net new stores.

[3] OP margin refers to operating profit as a percentage of total revenues.

[4] Digital sales refer to sales at Company-owned stores where orderings were placed digitally.

Key Financial Results


Third Quarter




Year to Date Ended 9/30









%/ppts Change










%/ppts Change



2024



2023



Reported



Ex F/X




2024



2023



Reported



Ex F/X


System Sales Growth (5) (%)


4




15



NM



NM





5




20



NM



NM


Same-Store Sales Growth (5) (%)


(3)




4



NM



NM





(3)




8



NM



NM


Operating Profit ($mn)


371




323




+15




+14





1,011




996




+1




+5


Adjusted Operating Profit (6) ($mn)


371




327




+13




+13





1,011




1,005




+1




+4


Core Operating Profit (6) (7) ($mn)


369




312



NM




+18





1,040




951



NM




+10


OP Margin (%)


12.1




11.1




+1.0




+1.0





11.6




11.7




(0.1)





Core OP Margin (6) (8) (%)


12.1




10.7



NM




+1.4





11.7




11.2



NM




+0.5


Net Income ($mn)


297




244




+22




+21





796




730




+9




+12


Adjusted Net Income (6) ($mn)


297




248




+20




+19





796




739




+8




+11


Diluted Earnings
  Per Common Share ($)


0.77




0.58




+33




+32





2.03




1.73




+17




+20


Adjusted Diluted Earnings
  Per Common Share (6) ($)


0.77




0.59




+31




+30





2.03




1.75




+16




+19


[5] System sales and same-store sales percentages exclude the impact of F/X. Effective January 1, 2018, temporary store closures are normalized in the same-store sales calculation by excluding the period during which stores are temporarily closed.

[6] See "Reconciliation of Reported GAAP Results to Non-GAAP Measures" included in the accompanying tables of this release for further details.

[7] Current period amounts are derived by translating results at average exchange rates of the prior year period.

[8] Core OP margin refers to core operating profit as a percentage of total revenues excluding F/X.
Note: All comparisons are versus the same period a year ago.
Percentages may not recompute due to rounding.
NM refers to not meaningful.

Stepping Up Capital Returns to Shareholders

  • The Company plans to step up the capital returns to shareholders from $3 billion to $4.5 billion between 2024 and 2026, representing an increase of 50%.

  • As part of the enlarged capital returns program, the Company plans to return $1.5 billion for the full year 2024. In the first nine months, the Company returned a record $1.24 billion to shareholders, including $1.06 billion in share repurchases and $187 million in cash dividends. Yum China repurchased 27.3 million shares of common stock, which is equivalent to approximately 7% of its outstanding shares as of December 31, 2023.

  • In November 2024, Yum China's board of directors (the "Board") increased the Company's share repurchase authorization by $1 billion, bringing total authorization since 2017 to an aggregate of $4.4 billion. From 2017 to November 1, 2024, the Company repurchased approximately 71.8 million shares of common stock for $3.0 billion. Our remaining authorization is approximately $1.4 billion.

  • The Board declared a cash dividend of $0.16 per share on Yum China's common stock, payable on December 17, 2024, to shareholders of record as of the close of business on November 26, 2024.

KFC


Third Quarter


Year to Date Ended 9/30









%/ppts Change








%/ppts Change



2024



2023



Reported



Ex F/X


2024



2023



Reported



Ex F/X


Restaurants


11,283




9,917




+14



NM



11,283




9,917




+14



NM


System Sales Growth (%)


6




15



NM



NM



6




21



NM



NM


Same-Store Sales Growth (%)


(2)




4



NM



NM



(2)




9



NM



NM


Total Revenues ($mn)


2,311




2,186




+6




+5



6,555




6,368




+3




+5


Operating Profit ($mn)


364




342




+6




+6



1,000




1,035




(3)




(1)


Core Operating Profit ($mn)


362




332



NM




+9



1,027




991



NM




+4


OP Margin (%)


15.7



15.6




+0.1




+0.2



15.2




16.3




(1.1)




(1.0)


Restaurant Margin (%)


18.3




18.6




(0.3)




(0.3)



18.0




19.4




(1.4)




(1.4)


  • System sales for KFC grew 6% YoY in the quarter, primarily driven by net new unit contribution of 8%.

  • Same-store sales reached 98% of the prior year's level, improved from 97% in the second quarter.

  • Delivery sales grew 19% YoY, continuing the double-digit annual growth trend since the spin-off and contributing approximately 40% of KFC's Company sales for the quarter. Off-premises dining accounted for approximately 68% of KFC's Company sales.

  • KFC opened 352 net new stores during the quarter. 134 net new stores, or 38%, were opened by franchisees. Total store count reached 11,283 as of September 30, 2024.

  • Operating profit grew 6% YoY to $364 million, a record level for the third quarter since the spin-off. Core operating profit increased 9% YoY.

  • OP margin was 15.7%, an increase of 10 basis points YoY.

  • Restaurant margin was 18.3% for the quarter. Excluding items affecting comparability, restaurant margin increased by 30 basis points, primarily due to improved operational efficiency and favorable commodity prices, partially offset by increased value-for-money offerings to drive traffic and wage inflation.

Pizza Hut


Third Quarter

Year to Date Ended 9/30






%/ppts Change





%/ppts Change


2024


2023


Reported


Ex F/X

2024


2023


Reported


Ex F/X

Restaurants

3,606


3,202


+13


NM

3,606


3,202


+13


NM

System Sales Growth (%)

2


13


NM


NM

2


19


NM


NM

Same-Store Sales Growth (%)

(6)


2


NM


NM

(6)


7


NM


NM

Total Revenues ($mn)

615


599


+2


+1

1,750


1,750



+2

Operating Profit ($mn)

52


47


+13


+13

139


137


+2


+5

Core Operating Profit ($mn)

52


43


NM


+20

143


129


NM


+12

OP Margin (%)

8.6


7.8


+0.8


+0.8

8.0


7.8


+0.2


+0.2

Restaurant Margin (%)

12.8


12.7


+0.1


+0.1

12.8


13.1


(0.3)


(0.3)

  • System sales for Pizza Hut grew 2% YoY in the quarter, primarily driven by net new unit contribution of 7%.

  • Same-store sales reached 94% of the prior year's level, improved from 92% in the second quarter.

  • Delivery sales grew 11% YoY, contributing approximately 39% of Pizza Hut's Company sales for the quarter. Off-premises dining accounted for approximately 49% of Pizza Hut's Company sales.

  • Pizza Hut opened 102 net new stores during the quarter. 15 net new stores, or 15%, were opened by franchisees. Total store count reached 3,606 as of September 30, 2024.

  • Operating profit grew 13% YoY to $52 million. Core operating profit increased 20% YoY.

  • OP margin was 8.6%, an increase of 80 basis points YoY.

  • Restaurant margin was 12.8% for the quarter. Excluding items affecting comparability, restaurant margin was up 60 basis points YoY. Higher operational efficiency and favorable commodity prices offset the impact of increased value-for-money offerings to drive traffic and wage inflation, resulting in an increased margin.

Outlook

The Company's targets for the 2024 fiscal year remain unchanged from the prior period's disclosures.

  • Open approximately 1,500 to 1,700 net new stores.

  • Make capital expenditures in the range of approximately $700 million to $850 million.

  • Return a Company record-setting $1.5 billion to shareholders through quarterly cash dividends and share repurchases.

Note on Non-GAAP Measures

Reported GAAP results include items that are excluded from non-GAAP measures. See "Reconciliation of Reported GAAP Results to Non-GAAP Measures" and "Segment Results" within this release for non-GAAP reconciliation details. 

Conference Call

Yum China's management will hold an earnings conference call at 7:00 a.m. U.S. Eastern Time on Monday, November 4, 2024 (8:00 p.m. Beijing/Hong Kong Time on Monday, November 4, 2024).  

This change from the Company's previous practice of releasing earnings after the U.S. market closes (before the trading hours of the Hong Kong Stock Exchange) is designed to better serve our global investor base by offering a more convenient time.

A live webcast of the call may be accessed at https://edge.media-server.com/mmc/p/asco39nb.

To join by phone, please register in advance of the conference through the link provided below. Upon registering, you will be provided with participant dial-in numbers, a passcode and a unique access PIN.

Pre-registration link: https://s1.c-conf.com/diamondpass/10042700-y56ut2.html

A replay of the conference call will be available one hour after the call ends until Monday, November 11, 2024, and may be accessed by phone at the following numbers:

U.S.:

1 855 883 1031

Mainland China:                       

400 1209 216

Hong Kong:

800 930 639

U.K.:

0800 031 4295



Replay PIN:

10042700

Additionally, this earnings release, the accompanying slides, as well as the live and archived webcast of this conference call will be available at Yum China's Investor Relations website at http://ir.yumchina.com

For important news and information regarding Yum China, including our filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange, visit Yum China's Investor Relations website at http://ir.yumchina.com. Yum China uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including under "2024 Outlook." We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as "expect," "expectation," "believe," "anticipate," "may," "could," "intend," "belief," "plan," "estimate," "target," "predict," "project," "likely," "will," "continue," "should," "forecast," "outlook," "commit" or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements include, without limitation, statements regarding the future strategies, growth, business plans, investments, store openings, capital expenditures, dividend and share repurchase plans, CAGR for system sales, operating profit and EPS, earnings, performance and returns of Yum China, anticipated effects of population and macroeconomic trends, pace of recovery of Yum China's business, the anticipated effects of our innovation, digital and delivery capabilities and investments on growth and beliefs regarding the long-term drivers of Yum China's business. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks and uncertainties that are difficult to predict and could cause our actual results or events to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or assumptions will be achieved. The forward-looking statements included in this press release are only made as of the date of this press release, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. Numerous factors could cause our actual results or events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to achieve development goals at the times and in the amounts currently anticipated, if at all, the success of our marketing campaigns and product innovation, our ability to maintain food safety and quality control systems, changes in public health conditions, our ability to control costs and expenses, including tax costs, as well as changes in political, economic and regulatory conditions in China, and those set forth under the caption "Risk Factors" in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Our plan of capital returns to shareholders is based on current expectations, which may change based on market conditions, capital needs or otherwise. In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q) for additional detail about factors that could affect our financial and other results.

About Yum China Holdings, Inc.

Yum China is the largest restaurant company in China with a mission to make every life taste beautiful. The Company has approximately 400,000 employees and operates over 15,000 restaurants under six brands across around 2,200 cities in China. KFC and Pizza Hut are the leading brands in the quick-service and casual dining restaurant spaces in China, respectively. In addition, Yum China has partnered with Lavazza to develop the Lavazza coffee concept in China. Little Sheep and Huang Ji Huang specialize in Chinese cuisine. Taco Bell offers innovative Mexican-inspired food. Yum China has a world-class, digitalized supply chain, which includes an extensive network of logistics centers nationwide and an in-house supply chain management system. Its strong digital capabilities and loyalty program enable the Company to reach customers faster and serve them better. Yum China is a Fortune 500 company with the vision to be the world's most innovative pioneer in the restaurant industry. For more information, please visit http://ir.yumchina.com

Contacts

Investor Relations Contact:
Tel: +86 21 2407 7556
IR@YumChina.com  

Media Contact:
Tel: +86 21 2407 8288 / +852 2267 5807
Media@YumChina.com

 

Yum China Holdings, Inc.

Condensed Consolidated Statements of Income

(in US$ million, except per share data)

(unaudited)


















Quarter Ended


% Change


Year to Date Ended


% Change



9/30/2024


9/30/2023


B/(W)


9/30/2024


9/30/2023


B/(W)

Revenues















Company sales


$     2,895


$     2,759


5



$      8,217


$      8,048


2


Franchise fees and income


25


23


8



72


69


3


Revenues from transactions with franchisees


116


100


16



319


282


13


Other revenues


35


32


14



100


86


17


Total revenues


3,071


2,914


5



8,708


8,485


3


Costs and Expenses, Net















Company restaurants















Food and paper


918


858


(7)



2,611


2,466


(6)


Payroll and employee benefits


728


699


(4)



2,102


2,047


(3)


Occupancy and other operating expenses


755


732


(3)



2,126


2,098


(1)


Company restaurant expenses


2,401


2,289


(5)



6,839


6,611


(3)


General and administrative expenses


139


169


18



412


485


15


Franchise expenses


10


9


(11)



29


28


(6)


Expenses for transactions with franchisees


110


95


(16)



306


270


(13)


Other operating costs and expenses


32


29


(10)



90


77


(17)


Closures and impairment expenses, net


8



 NM 



22


17


(32)


Other expenses (income), net




 NM 



(1)


1


 NM 


Total costs and expenses, net


2,700


2,591


(4)



7,697


7,489


(3)


Operating Profit


371


323


15



1,011


996


1


Interest income, net


31


46


(32)



100


124


(19)


Investment gain (loss)


34


(4)


 NM 



50


(32)


 NM 


Income Before Income Taxes and
  Equity in Net Earnings (Losses) from
  Equity Method Investments


436


365


20



1,161


1,088


7


Income tax provision


(119)


(100)


(19)



(309)


(296)


(5)


Equity in net earnings (losses) from
   equity method investments


2


2


(11)



2


2


(11)


Net income – including noncontrolling interests


319


267


20



854


794


8


Net income – noncontrolling interests


22


23


3



58


64


9


Net Income – Yum China Holdings, Inc.


$        297


$        244


22



$         796


$         730


9


Effective tax rate


27.3 %


27.5 %


0.2

 ppts. 


26.6 %


27.2 %


0.6

 ppts. 
















Basic Earnings Per Common Share


$       0.77


$       0.59





$        2.04


$        1.75




Weighted-average shares outstanding
    (in millions)


384


416





391


417



















Diluted Earnings Per Common Share


$       0.77


$       0.58





$        2.03


$        1.73




Weighted-average shares outstanding
    (in millions)


385


420





393


421

















































OP margin


12.1 %


11.1 %


1.0

ppts.


11.6 %


11.7 %


(0.1)

ppts.
















Company sales


100.0 %


100.0 %





100.0 %


100.0 %




Food and paper


31.7


31.1


(0.6)

 ppts. 


31.8


30.6


(1.2)

ppts.

Payroll and employee benefits


25.1


25.3


0.2

 ppts. 


25.6


25.4


(0.2)

ppts.

Occupancy and other operating expenses


26.2


26.6


0.4

 ppts. 


25.8


26.1


0.3

ppts.

Restaurant margin


17.0 %


17.0 %


 ppts. 


16.8 %


17.9 %


(1.1)

ppts.































Percentages may not recompute due to rounding. NM refers to not meaningful.


 

Yum China Holdings, Inc.

KFC Operating Results

(in US$ million)

(unaudited)


















Quarter Ended


% Change


Year to Date Ended


% Change



9/30/2024


9/30/2023


B/(W)


9/30/2024


9/30/2023


B/(W)

Revenues















Company sales


$      2,276


$      2,154


6



$      6,452


$      6,274


3


Franchise fees and income


19


16


15



53


48


10


Revenues from transactions with franchisees


15


12


23



41


33


25


Other revenues


1


4


(63)



9


13


(29)


Total revenues


2,311


2,186


6



6,555


6,368


3


Costs and Expenses, Net















Company restaurants















Food and paper


713


666


(7)



2,033


1,914


(6)


Payroll and employee benefits


558


528


(6)



1,613


1,538


(5)


Occupancy and other operating expenses


588


560


(5)



1,647


1,603


(3)


Company restaurant expenses


1,859


1,754


(6)



5,293


5,055


(5)


General and administrative expenses


62


68


10



183


203


10


Franchise expenses


8


8


(10)



25


24


(6)


Expenses for transactions with franchisees


13


11


(19)



36


29


(21)


Other operating costs and expenses


1


3


76



7


11


37


Closures and impairment expenses, net


4



 NM 



11


9


(33)


Other expenses, net




(151)




2


76


Total costs and expenses, net


1,947


1,844


(6)



5,555


5,333


(4)


Operating Profit


$         364


$         342


6



$      1,000


$      1,035


(3)


OP margin


15.7 %


15.6 %


0.1

ppts.


15.2 %


16.3 %


(1.1)

ppts.
















Company sales


100.0 %


100.0 %





100.0 %


100.0 %




Food and paper


31.3


30.9


(0.4)

ppts.


31.5


30.5


(1.0)

ppts.

Payroll and employee benefits


24.5


24.5


ppts.


25.0


24.5


(0.5)

ppts.

Occupancy and other operating expenses


25.9


26.0


0.1

ppts.


25.5


25.6


0.1

ppts.

Restaurant margin


18.3 %


18.6 %


(0.3)

ppts.


18.0 %


19.4 %


(1.4)

ppts.































Percentages may not recompute due to rounding. NM refers to not meaningful.


 

Yum China Holdings, Inc.

Pizza Hut Operating Results

(in US$ million)

(unaudited)


















Quarter Ended


% Change


Year to Date Ended


% Change



9/30/2024


9/30/2023


B/(W)


9/30/2024


9/30/2023


B/(W)

Revenues















Company sales


$         606


$         591


2



$      1,723


$      1,728



Franchise fees and income


2


2


8



6


6


4


Revenues from transactions with franchisees


2


1


20



4


3


7


Other revenues


5


5


(4)



17


13


30


Total revenues


615


599


2



1,750


1,750



Costs and Expenses, Net















Company restaurants















Food and paper


202


187


(7)



567


537


(5)


Payroll and employee benefits


167


167




479


496


3


Occupancy and other operating expenses


160


162


2



457


469


3


Company restaurant expenses


529


516


(2)



1,503


1,502



General and administrative expenses


26


30


15



80


89


11


Franchise expenses


1


1


(6)



3


3


(3)


Expenses for transactions with franchisees


1


1


(6)



3


3


2


Other operating costs and expenses


5


4


(7)



16


11


(43)


Closures and impairment expenses, net


1



 NM 



6


5


(17)


Total costs and expenses, net


563


552


(1)



1,611


1,613



Operating Profit


$           52


$           47


13



$         139


$         137


2


OP margin


8.6 %


7.8 %


0.8

ppts.


8.0 %


7.8 %


0.2

ppts.
















Company sales


100.0 %


100.0 %





100.0 %


100.0 %




Food and paper


33.2


31.7


(1.5)

ppts.


32.9


31.1


(1.8)

ppts.

Payroll and employee benefits


27.5


28.1


0.6

ppts.


27.8


28.7


0.9

ppts.

Occupancy and other operating expenses


26.5


27.5


1.0

ppts.


26.5


27.1


0.6

ppts.

Restaurant margin


12.8 %


12.7 %


0.1

ppts.


12.8 %


13.1 %


(0.3)

ppts.































Percentages may not recompute due to rounding. NM refers to not meaningful.


 

Yum China Holdings, Inc.

Condensed Consolidated Balance Sheets

(in US$ million)








9/30/2024


12/31/2023



(Unaudited)



ASSETS





Current Assets





Cash and cash equivalents


$        1,193


$        1,128

Short-term investments


1,338


1,472

Accounts receivable, net


79


68

Inventories, net


359


424

Prepaid expenses and other current assets


348


339

Total Current Assets


3,317


3,431

Property, plant and equipment, net


2,431


2,310

Operating lease right-of-use assets


2,215


2,217

Goodwill


1,955


1,932

Intangible assets, net


150


150

Long-term bank deposits and notes


933


1,265

Equity investments


388


332

Deferred income tax assets


145


129

Other assets


267


265

Total Assets


11,801


12,031






LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY





Current Liabilities





Accounts payable and other current liabilities


2,103


2,164

Short-term borrowings


315


168

Income taxes payable


160


90

Total Current Liabilities


2,578


2,422

Non-current operating lease liabilities


1,880


1,899

Non-current finance lease liabilities


51


44

Deferred income tax liabilities


406


390

Other liabilities


158


157

Total Liabilities


5,073


4,912






Redeemable Noncontrolling Interest


13


13






Equity





Common stock, $0.01 par value; 1,000 million shares authorized; 382 million shares
      and 407 million shares issued at September 30, 2024 and December 31, 2023, respectively;
      381 million shares and 407 million shares outstanding at September 30, 2024 and
      December 31, 2023, respectively.


4


4

Treasury stock


(18)


Additional paid-in capital


4,053


4,320

Retained earnings


2,156


2,310

Accumulated other comprehensive loss


(179)


(229)

Total Yum China Holdings, Inc. Stockholders' Equity


6,016


6,405

Noncontrolling interests


699


701

Total Equity


6,715


7,106

Total Liabilities, Redeemable Noncontrolling Interest and Equity


$      11,801


$       12,031

 

Yum China Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in US$ million)

(unaudited)











Year to Date Ended




9/30/2024



9/30/2023

Cash Flows – Operating Activities







Net income – including noncontrolling interests



$                  854



$                  794

Depreciation and amortization



355



339

Non-cash operating lease cost



305



301

Closures and impairment expenses



22



17

Investment (gain) loss



(50)



32

Equity in net (earnings) losses from equity method investments



(2)



(2)

Distributions of income received from equity method investments



7



8

Deferred income taxes



(4)



(6)

Share-based compensation expense



32



46

Changes in accounts receivable



(4)



(2)

Changes in inventories



69



(25)

Changes in prepaid expenses, other current assets and value-added tax assets



3



(10)

Changes in accounts payable and other current liabilities



(83)



112

Changes in income taxes payable



67



71

Changes in non-current operating lease liabilities



(303)



(295)

Other, net



(16)



(46)

Net Cash Provided by Operating Activities



1,252



1,334

Cash Flows – Investing Activities







Capital spending



(523)



(499)

Purchases of short-term investments, long-term bank deposits and notes



(3,330)



(3,287)

Maturities of short-term investments, long-term bank deposits and notes



3,821



2,730

Other, net



4



4

Net Cash Used in Investing Activities



(28)



(1,052)

Cash Flows – Financing Activities







Proceeds from short-term borrowings



307



212

Repayment of short-term borrowings



(167)



Repurchase of shares of common stock



(1,057)



(280)

Cash dividends paid on common stock



(187)



(162)

Dividends paid to noncontrolling interests



(36)



(37)

Contributions from noncontrolling interests





35

Payment of acquisition related holdback 





(3)

Other, net



(19)



(5)

Net Cash Used in Financing Activities



(1,159)



(240)

Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash





(41)

Net Increase in Cash, Cash Equivalents and Restricted Cash



65



1

Cash, Cash Equivalents, and Restricted Cash - Beginning of Period



1,128



1,130

Cash, Cash Equivalents, and Restricted Cash - End of Period



$               1,193



$               1,131

In this press release:

  • Certain performance metrics and non-GAAP measures are presented excluding the impact of foreign currency translation ("F/X"). These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the F/X impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.

  • System sales growth reflects the results of all restaurants regardless of ownership, including Company-owned and franchise restaurants that operate our restaurant concepts, except for non-Company-owned restaurants for which we do not receive a sales-based royalty. Sales of franchise restaurants typically generate ongoing franchise fees for the Company at an average rate of approximately 6% of system sales. Franchise restaurant sales are not included in Company sales in the Condensed Consolidated Statements of Income; however, the franchise fees are included in the Company's revenues. We believe system sales growth is useful to investors as a significant indicator of the overall strength of our business as it incorporates all of our revenue drivers, Company and franchise same-store sales as well as net unit growth.

  • Effective January 1, 2018, the Company revised its definition of same-store sales growth to represent the estimated percentage change in sales of food of all restaurants in the Company system that have been open prior to the first day of our prior fiscal year, excluding the period during which stores are temporarily closed. We refer to these as our "base" stores. Previously, same-store sales growth represented the estimated percentage change in sales of all restaurants in the Company system that have been open for one year or more, including stores temporarily closed, and the base stores changed on a rolling basis from month to month. This revision was made to align with how management measures performance internally and focuses on trends of a more stable base of stores.

 

Unit Count by Brand

















KFC



12/31/2023


New Builds


Closures


Acquired


9/30/2024




Company-owned                        


9,237


904


(185)


2


9,958




Franchisees


1,059


285


(17)


(2)


1,325




Total


10,296


1,189


(202)



11,283
































Pizza Hut



12/31/2023


New Builds


Closures


9/30/2024






Company-owned


3,155


380


(107)


3,428






Franchisees


157


26


(5)


178






Total


3,312


406


(112)


3,606




















Others



12/31/2023


New Builds


Closures


9/30/2024






Company-owned


256


13


(84)


185






Franchisees


780


97


(90)


787






Total


1,036


110


(174)


972




















 

 

Reconciliation of Reported GAAP Results to Non-GAAP Measures
(in millions, except per share data)
(unaudited)

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") in this press release, the Company provides the following non-GAAP measures:

  • Measures adjusted for Special Items, which include Adjusted Operating Profit, Adjusted Net Income, Adjusted Earnings Per Common Share ("EPS"), Adjusted Effective Tax Rate and Adjusted EBITDA;

  • Company Restaurant Profit ("Restaurant profit") and Restaurant margin;

  • Core Operating Profit and Core OP margin, which exclude Special Items, and further adjusted for Items Affecting Comparability and the impact of F/X;

These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP.  Rather, the Company believes that the presentation of these non-GAAP measures provides additional information to investors to facilitate the comparison of past and present results, excluding those items that the Company does not believe are indicative of our core operations.

With respect to non-GAAP measures adjusted for Special Items, the Company excludes impact from Special Items for the purpose of evaluating performance internally and uses them as factors in determining compensation for certain employees. Special Items are not included in any of our segment results.

Adjusted EBITDA is defined as net income including noncontrolling interests adjusted for equity in net earnings (losses) from equity method investments, income tax, interest income, net, investment gain or loss, depreciation and amortization, store impairment charges, and Special Items. Store impairment charges included as an adjustment item in Adjusted EBITDA primarily resulted from our semi-annual impairment evaluation of long-lived assets of individual restaurants, and additional impairment evaluation whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If these restaurant-level assets were not impaired, depreciation of the assets would have been recorded and included in EBITDA. Therefore, store impairment charges were a non-cash item similar to depreciation and amortization of our long-lived assets of restaurants. The Company believes that investors and analysts may find it useful in measuring operating performance without regard to such non-cash items.

Restaurant Profit is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales, including cost of food and paper, restaurant-level payroll and employee benefits, rent, depreciation and amortization of restaurant-level assets, advertising expenses, and other operating expenses. Company restaurant margin percentage is defined as Restaurant profit divided by Company sales. We also use Restaurant profit and Restaurant margin for the purposes of internally evaluating the performance of our Company-owned restaurants and we believe they provide useful information to investors as to the profitability of our Company-owned restaurants.

Core Operating Profit is defined as Operating Profit adjusted for Special Items, and further excluding Items Affecting Comparability and the impact of F/X. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Items such as charges, gains and accounting changes which are viewed by management as significantly impacting the current period or the comparable period, due to changes in policy or other external factors, or non-cash items pertaining to underlying activities that are different from or unrelated to our core operations, are generally considered "Items Affecting Comparability." Examples of Items Affecting Comparability include, but are not limited to: temporary relief from landlords and government agencies; VAT deductions due to tax policy changes; and amortization of reacquired franchise rights recognized upon acquisitions. We believe presenting Core Operating Profit provides additional information to further enhance comparability of our operating results and we use this measure for purposes of evaluating the performance of our core operations. Core OP margin is defined as Core Operating Profit divided by Total revenues, excluding the impact of F/X.

The following tables set forth the reconciliation of the most directly comparable GAAP financial measures to the non-GAAP financial measures. The reconciliation of GAAP Operating Profit to Restaurant Profit and Core Operating Profit by segment is presented in Segment Results within this release.

 



Quarter Ended


Year to Date Ended



9/30/2024


9/30/2023


9/30/2024


9/30/2023



















Reconciliation of Operating Profit to Adjusted Operating Profit









Operating Profit


$             371


$            323


$      1,011


$         996

Special Items, Operating Profit 



(4)



(9)

Adjusted Operating Profit


$             371


$            327


$      1,011


$      1,005

Reconciliation of Net Income to Adjusted Net Income









Net Income – Yum China Holdings, Inc.


$             297


$            244


$         796


$         730

Special Items, Net Income –Yum China Holdings, Inc.



(4)



(9)

Adjusted Net Income – Yum China Holdings, Inc.


$             297


$            248


$         796


$         739

Reconciliation of EPS to Adjusted EPS









Basic Earnings Per Common Share


$            0.77


$           0.59


$        2.04


$        1.75

Special Items, Basic Earnings Per Common Share



(0.01)



(0.02)

Adjusted Basic Earnings Per Common Share


$            0.77


$           0.60


$        2.04


$        1.77

Diluted Earnings Per Common Share


$            0.77


$           0.58


$        2.03


$        1.73

Special Items, Diluted Earnings Per Common Share



(0.01)



(0.02)

Adjusted Diluted Earnings Per Common Share


$            0.77


$           0.59


$        2.03


$        1.75

Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate









Effective tax rate


27.3 %


27.5 %


26.6 %


27.2 %

Impact on effective tax rate as a result of Special Items



0.3 %



0.2 %

Adjusted effective tax rate


27.3 %


27.2 %


26.6 %


27.0 %

 

Net income, along with the reconciliation to Adjusted EBITDA, is presented below:



Quarter Ended


Year to Date Ended



9/30/2024


9/30/2023


9/30/2024


9/30/2023



















Net Income – Yum China Holdings, Inc.


$         297


$         244


$         796


$         730

Net income – noncontrolling interests


22


23


58


64

Equity in net (earnings) losses from equity method investments                                            


(2)


(2)


(2)


(2)

Income tax provision


119


100


309


296

Interest income, net


(31)


(46)


(100)


(124)

Investment (gain) loss


(34)


4


(50)


32

Operating Profit


371


323


1,011


996

Special Items, Operating Profit



4



9

Adjusted Operating Profit


371


327


1,011


1,005

Depreciation and amortization


120


111


355


339

Store impairment charges


10


3


29


24

Adjusted EBITDA


$         501


$         441


$      1,395


$      1,368

 

Details of Special Items are presented below:



Quarter Ended


Year to Date Ended



9/30/2024


9/30/2023


9/30/2024


9/30/2023










Share-based compensation expense for Partner PSU Awards(1)                                                      


$          —


$           (4)


$          —


$           (9)

Special Items, Operating Profit



(4)



(9)

Tax effect on Special Items(2)





Special Items, net income – including noncontrolling interests



(4)



(9)

Special Items, net income – noncontrolling interests





Special Items, Net Income –Yum China Holdings, Inc.


$          —


$           (4)


$          —


$           (9)

Weighted-average Diluted Shares Outstanding (in millions)


385


420


393


421

Special Items, Diluted Earnings Per Common Share


$          —


$      (0.01)


$          —


$      (0.02)


(1) In February 2020, the Company granted Partner PSU Awards to select employees who were deemed critical to the Company's execution of its strategic operating plan. These PSU awards will only vest if threshold performance goals are achieved over a four-year performance period, with the payout ranging from 0% to 200% of the target number of shares subject to the PSU awards. These awards vested as of December 31, 2023 with a payout in the first quarter of 2024. Partner PSU Awards were granted to address increased competition for executive talent, motivate transformational performance and encourage management retention. Given the unique nature of these grants, the Compensation Committee does not intend to grant similar, special grants to the same employees during the performance period. The impact from these special awards is excluded from metrics that management uses to assess the Company's performance.


(2) The tax expense was determined based upon the nature, as well as the jurisdiction, of each Special Item at the applicable tax rate.

 

Operating Profit, along with the reconciliation to Core Operating Profit, is presented below:



 

Quarter ended

 

 

% Change

 

 

Year to Date Ended

 

 

% Change

 



 

9/30/2024

 

 

9/30/2023

 

 

B/(W)

 

 

9/30/2024

 

 

9/30/2023

 

 

B/(W)

 















Operating profit


$         371


$         323


15


$        1,011


$         996


1


Special Items, Operating Profit 



4





9




Adjusted Operating Profit


$         371


$         327


13


$        1,011


$      1,005


1


Items Affecting Comparability














Temporary relief from landlords(1)







(10)




Temporary relief from government agencies(2)



(1)





(4)




VAT deductions(3)



(14)





(42)




Amortization of reacquired franchise rights(4)







2




F/X impact


(2)





29





Core Operating Profit


$         369


$         312


18


$        1,040


$         951


10


Total revenues


3,071


2,914


5


8,708


8,485


3


F/X impact


(31)





208





Total revenues, excluding the impact of F/X


$      3,040


$      2,914


4


$        8,916


$      8,485


5


Core OP margin


12.1 %


10.7 %


1.4

ppts

11.7 %


11.2 %


0.5

ppts.


(1) In relation to the effects of the COVID-19 pandemic, the Company was granted lease concessions from landlords. The lease concessions were primarily in the form of rent reduction over the period of time when the Company's restaurant business was adversely impacted. Such concessions were primarily recognized as a reduction of Occupancy and other operating expenses within Company restaurant expenses included in the Condensed Consolidated Statement of Income in the period the concession was granted.


(2) In relation to the effects of the COVID-19 pandemic, the Company received government subsidies for employee benefits and providing training to employees. The temporary relief was primarily recognized as a reduction to Payroll and employee benefits within Company restaurant expenses included in the Condensed Consolidated Statement of Income.


(3) Pursuant to the tax policy issued by relevant government authorities, general VAT taxpayers in certain industries that meet certain criteria are allowed to claim an additional 10% or 15% input VAT, which will be used to offset their VAT payables. This VAT policy was further extended to December 31, 2023 but the additional deduction was reduced to 5% or 10% respectively. VAT deductions were primarily recorded as a reduction to Food and paper and Occupancy and other operating expenses within Company restaurant expenses included in the Condensed Consolidated Statements of Income. Such preferential policy was not extended in 2024.


(4) As a result of the acquisition of our previously unconsolidated joint ventures of Hangzhou KFC, Suzhou KFC and Wuxi KFC, $66 million, $61 million and $61 million of the purchase price were allocated to intangible assets related to reacquired franchise rights, respectively, which were amortized over the remaining franchise contract period of 1 year, 2.4 years and 5 years, respectively. The reacquired franchise rights were fully amortized as of March 31, 2023. The amortization was recorded in Other Expenses (Income), net included in the Condensed Consolidated Statements of Income.

 

Yum China Holdings, Inc.

Segment Results

(in US$ million)

(unaudited)
















Quarter Ended 9/30/2024



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

Company sales


$      2,276


$         606


$                13


$                —


$              —


$      2,895

Franchise fees and income


19


2


4




25

Revenues from transactions with franchisees(2)


15


2


19


80



116

Other revenues


1


5


176


17


(164)


35

Total revenues


$      2,311


$         615


$               212


$                97


$          (164)


$      3,071

Company restaurant expenses


1,859


529


14



(1)


2,401

General and administrative expenses


62


26


9


42



139

Franchise expenses


8


1


1




10

Expenses for transactions with franchisees(2)


13


1


17


79



110

Other operating costs and expenses


1


5


172


17


(163)


32

Closures and impairment expenses, net


4


1


3




8

Total costs and expenses, net


1,947


563


216


138


(164)


2,700

Operating Profit (Loss)


$         364


$           52


$                 (4)


$               (41)


$              —


$         371



























Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:












Quarter Ended 9/30/2024



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

GAAP Operating Profit (Loss)


$         364


$           52


$                 (4)


$               (41)


$              —


$         371

Less:













Franchise fees and income


19


2


4




25

Revenues from transactions with franchisees(2)


15


2


19


80



116

Other revenues


1


5


176


17


(164)


35

Add:













General and administrative expenses


62


26


9


42



139

Franchise expenses


8


1


1




10

Expenses for transactions with franchisees(2)


13


1


17


79



110

Other operating costs and expenses


1


5


172


17


(163)


32

Closures and impairment expenses, net


4


1


3




8

Restaurant profit (loss)


$         417


$           77


$                 (1)


$                —


$               1


$         494

Company sales


2,276


606


13




2,895

Restaurant margin %


18.3 %


12.8 %


(13.2) %


N/A


N/A


17.0 %



























Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:











Quarter Ended 9/30/2024



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

GAAP Operating Profit (Loss)


$         364


$           52


$                 (4)


$               (41)


$              —


$         371

Special Items, Operating Profit 







Adjusted Operating Profit (Loss)


$         364


$           52


$                 (4)


$               (41)


$              —


$         371

F/X impact


(2)






(2)

Core Operating Profit (Loss)


$         362


$           52


$                 (4)


$               (41)


$              —


$         369
















Quarter Ended 9/30/2023



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

Company sales


$      2,154


$         591


$                14


$                —


$              —


$      2,759

Franchise fees and income


16


2


5




23

Revenues from transactions with franchisees(2)


12


1


20


67



100

Other revenues


4


5


162


12


(151)


32

Total revenues


$      2,186


$         599


$               201


$                79


$          (151)


$      2,914

Company restaurant expenses


1,754


516


20



(1)


2,289

General and administrative expenses


68


30


11


60



169

Franchise expenses


8


1





9

Expenses for transactions with franchisees(2)


11


1


17


66



95

Other operating costs and expenses


3


4


160


12


(150)


29

Total costs and expenses, net


1,844


552


208


138


(151)


2,591

Operating Profit (Loss)


$         342


$           47


$                 (7)


$               (59)


$              —


$         323



























Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:












Quarter Ended 9/30/2023



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

GAAP Operating Profit (Loss)


$         342


$           47


$                 (7)


$               (59)


$              —


$         323

Less:













Franchise fees and income


16


2


5




23

Revenues from transactions with franchisees(2)


12


1


20


67



100

Other revenues


4


5


162


12


(151)


32

Add:













General and administrative expenses


68


30


11


60



169

Franchise expenses


8


1





9

Expenses for transactions with franchisees(2)


11


1


17


66



95

Other operating costs and expenses


3


4


160


12


(150)


29

Restaurant profit (loss)


$         400


$           75


$                 (6)


$                —


$               1


$         470

Company sales


2,154


591


14




2,759

Restaurant margin %


18.6 %


12.7 %


(36.1) %


N/A


N/A


17.0 %



























Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:











Quarter Ended 9/30/2023



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

GAAP Operating Profit (Loss)


$         342


$           47


$                 (7)


$               (59)


$              —


$         323

Special Items, Operating Profit 





4



4

Adjusted Operating Profit (Loss)


$         342


$           47


$                 (7)


$               (55)


$              —


$         327

Items Affecting Comparability













Temporary relief from landlords







Temporary relief from government agencies



(1)





(1)

VAT deductions


(10)


(3)


(1)




(14)

F/X impact







Core Operating Profit (Loss)


$         332


$           43


$                 (8)


$               (55)


$              —


$         312
















Year to Date Ended 9/30/2024



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

Company sales


$      6,452


$      1,723


$                42


$                —


$              —


$      8,217

Franchise fees and income


53


6


13




72

Revenues from transactions with franchisees(2)


41


4


55


219



319

Other revenues


9


17


484


48


(458)


100

Total revenues


$      6,555


$      1,750


$               594


$               267


$          (458)


$      8,708

Company restaurant expenses


5,293


1,503


45



(2)


6,839

General and administrative expenses


183


80


29


120



412

Franchise expenses


25


3


1




29

Expenses for transactions with franchisees(2)


36


3


50


217



306

Other operating costs and expenses


7


16


476


47


(456)


90

Closures and impairment expenses, net


11


6


5




22

Other expenses (income), net





(1)



(1)

Total costs and expenses, net


5,555


1,611


606


383


(458)


7,697

Operating Profit (Loss)


$      1,000


$         139


$               (12)


$             (116)


$              —


$      1,011



























Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:












Year to Date Ended 9/30/2024



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

GAAP Operating Profit (Loss)


$      1,000


$         139


$               (12)


$             (116)


$              —


$      1,011

Less:













Franchise fees and income


53


6


13




72

Revenues from transactions with franchisees(2)


41


4


55


219



319

Other revenues


9


17


484


48


(458)


100

Add:













General and administrative expenses


183


80


29


120



412

Franchise expenses


25


3


1




29

Expenses for transactions with franchisees(2)


36


3


50


217



306

Other operating costs and expenses


7


16


476


47


(456)


90

Closures and impairment expenses, net


11


6


5




22

Other expenses (income), net





(1)



(1)

Restaurant profit (loss)


$      1,159


$         220


$                 (3)


$                —


$               2


$      1,378

Company sales


6,452


1,723


42




8,217

Restaurant margin %


18.0 %


12.8 %


(11.8) %


N/A


N/A


16.8 %



























Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:











Year to Date Ended 9/30/2024



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

GAAP Operating Profit (Loss)


$      1,000


$         139


$               (12)


$             (116)


$              —


$      1,011

Special Items, Operating Profit 







Adjusted Operating Profit (Loss)


$      1,000


$         139


$               (12)


$             (116)


$              —


$      1,011

F/X impact


27


4



(2)



29

Core Operating Profit (Loss)


$      1,027


$         143


$               (12)


$             (118)


$              —


$      1,040
















Year to Date Ended 9/30/2023



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

Company sales


$      6,274


$      1,728


$                46


$                —


$              —


$      8,048

Franchise fees and income


48


6


15




69

Revenues from transactions with franchisees(2)


33


3


56


190



282

Other revenues


13


13


468


32


(440)


86

Total revenues


$      6,368


$      1,750


$               585


$               222


$          (440)


$      8,485

Company restaurant expenses


5,055


1,502


56



(2)


6,611

General and administrative expenses


203


89


32


161



485

Franchise expenses


24


3


1




28

Expenses for transactions with franchisees(2)


29


3


50


188



270

Other operating costs and expenses


11


11


463


30


(438)


77

Closures and impairment expenses, net


9


5


3




17

Other expenses (income), net


2




(1)



1

Total costs and expenses, net


5,333


1,613


605


378


(440)


7,489

Operating Profit (Loss)


$      1,035


$         137


$               (20)


$             (156)


$              —


$         996



























Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:












Year to Date Ended 9/30/2023



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

GAAP Operating Profit (Loss)


$      1,035


$         137


$               (20)


$             (156)


$              —


$         996

Less:













Franchise fees and income


48


6


15




69

Revenues from transactions with franchisees(2)


33


3


56


190



282

Other revenues


13


13


468


32


(440)


86

Add:













General and administrative expenses


203


89


32


161



485

Franchise expenses


24


3


1




28

Expenses for transactions with franchisees(2)


29


3


50


188



270

Other operating costs and expenses


11


11


463


30


(438)


77

Closures and impairment expenses, net


9


5


3




17

Other expenses (income), net


2




(1)



1

Restaurant profit (loss)


$      1,219


$         226


$               (10)


$                —


$               2


$      1,437

Company sales


6,274


1,728


46




8,048

Restaurant margin %


19.4 %


13.1 %


(21.6) %


N/A


N/A


17.9 %



























Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:











Year to Date Ended 9/30/2023



KFC


Pizza Hut


All Other Segments


Corporate
and
Unallocated(1)


Elimination


Total

GAAP Operating Profit (Loss)


$      1,035


$         137


$               (20)


$             (156)


$              —


$         996

Special Items, Operating Profit 





9



9

Adjusted Operating Profit (Loss)


$      1,035


$         137


$               (20)


$             (147)


$              —


$      1,005

Items Affecting Comparability













Temporary relief from landlords


(9)


(1)





(10)

Temporary relief from government agencies


(3)


(1)





(4)

VAT deductions


(34)


(6)


(2)




(42)

Amortization of reacquired franchise rights


2






2

F/X impact







Core Operating Profit (Loss)


$         991


$         129


$               (22)


$             (147)


$              —


$         951














The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated Statements of Income.  














(1) Amounts have not been allocated to any segment for purpose of making operating decision or assessing financial performance as the transactions
are deemed corporate revenues and expenses in nature.


(2) Primarily includes revenues and associated expenses of transactions with franchisees derived from the Company's central procurement model whereby
the Company centrally purchases substantially all food and paper products from suppliers and then sells and delivers to KFC and Pizza Hut restaurants,
including franchisees.

 

Cision View original content:https://www.prnewswire.com/news-releases/yum-china-reports-third-quarter-results-302295137.html

SOURCE Yum China Holdings, Inc.

FAQ

What was Yum China's (YUMC) revenue in Q3 2024?

Yum China reported total revenues of $3.07 billion in Q3 2024, representing a 5% increase year over year.

How many stores did Yum China (YUMC) open in Q3 2024?

Yum China opened 438 net new stores in Q3 2024, with 33% of these stores opened by franchisees.

What was Yum China's (YUMC) digital sales performance in Q3 2024?

Digital sales reached $2.61 billion in Q3 2024, accounting for approximately 90% of total Company sales.

What is Yum China's (YUMC) capital return plan for 2024-2026?

Yum China plans to increase capital returns to shareholders from $3 billion to $4.5 billion between 2024 and 2026.

Yum China Holdings, Inc.

NYSE:YUMC

YUMC Rankings

YUMC Latest News

YUMC Stock Data

18.50B
383.07M
0.31%
84.9%
4.12%
Restaurants
Retail-eating Places
Link
United States of America
PLANO