Yum China unveils "RGM 2.0" strategy and introduces 3-year financial targets at 2023 Investor Day
- Yum China targets double-digit EPS CAGR and $3 billion shareholder return from 2024 to 2026. Aims to reach 20,000 stores by 2026.
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Accelerates network expansion to reach 20,000 stores by 2026
Targets double-digit EPS CAGR and
Joey Wat, CEO of Yum China, commented, "We are excited about the significant opportunities
Additional highlights from the Investor Day presentations are included below.
2023 Investor Day Highlights:
KFC: Most powerful quick-service restaurant brand in
This year, KFC will celebrate its 10,000th store in
Pizza Hut: Leading casual dining restaurant brand in
Having passed the 3,000-restaurant mark this year, Pizza Hut is on track to achieve record-high net new stores in 2023, and plans to further increase the pace to 400-500 net new stores annually in the next three years. The brand intends to drive footprint growth with flexible store formats such as its proven satellite store format. At the same time, Pizza Hut is expanding its mass market appeal by creating affordable occasions, driving off-premise sales and streamlining services. The brand continues to reinforce its leadership position in the pizza category and is also expanding into more categories such as burgers and coffee. Pizza Hut also aims to further grow existing occasions such as breakfast and individual meals. Additionally, the brand will continue to transform its cost structures for more resilience and flexibility.
Lavazza: Iconic Italian coffee brand – Targeting China's fast-growing coffee segment with encouraging progress
Yum China's joint venture with world-renowned Italian coffee brand Lavazza has made encouraging progress in the past two years, now operating over 100 coffee shops in 11 cities along with a growing retail business. With an ambition to reach 1,000 stores in the next three to five years, it is deploying a four-pillar strategy focused on investing in brand building, refining its menu with a mix of authentic Italian and locally-inspired beverage and food items, expanding its digital presence and enhancing delivery capabilities, as well as upgrading store design and experience. In addition, the joint venture plans to further expand its retail business through collaborations with premium partners such as hotels, fine dining establishments and retailers, leveraging Lavazza's quality coffee beans.
Embracing AI to build future-ready digital capabilities
Yum China's rapid expansion is supported by a dynamic AI-empowered digital infrastructure. Through digitalized operational tools and automated technology solutions, the Company has streamlined workflows, empowered store management and increased flexibility. This has allowed
World-class supply chain supports long-term growth
Over the years, Yum China has built a formidable, agile and highly efficient supply chain to support its growth. With upstream supplier collaborations and innovative solutions such as full utilization of raw materials, the Company has been able to maintain competitive raw material costs. Going forward, the Company is building more company-owned logistics centers to enhance digitalized operations and create flexibility. The Company's ongoing efforts to optimize its intelligent network planning and multimodal delivery are expected to help it improve coverage and manage costs. Yum China is also making progress on its sustainability goal to transition its stores and support facilities to use renewable energy. Recently, its logistics center in
Building an industry-leading sustainable workforce
Yum China's people strategy centers on building a sustainable and engaged workforce to support the Company's fast growth. The Company has a robust talent development strategy with structured training and career paths in place to cultivate top operational talents. Additionally, the Company offers one of the leading employee care programs in
Balanced and systematic capital allocation
In accordance with the previously disclosed 5-year capital expenditure plan of approximately
2023 outlook
The recovery trajectory remains stable despite the near-term economic headwinds. The Company expects same-store sales to continue recovering steadily throughout the full year 2023, maintaining a pace of approximately
The Company increased its net new stores target for 2023 to 1,400-1,600, compared with its previous target of 1,100-1,300. Footprint growth is supported by the flexible store formats, healthy new store payback periods and a strong store pipeline. Management will continue to implement a disciplined and systematic approach in new store openings.
The Company maintained its capital expenditures target of approximately
Webcast Replay and Presentation Materials
A webcast replay of the Investor Day as well as the presentation materials are available at http://ir.yumchina.com.
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. 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, investment, dividend and share repurchase plans, 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, beliefs regarding the long-term drivers of Yum China's business and sustainability goals. 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, including the COVID-19 pandemic, our ability to control costs and expenses, including tax costs, as well as changes in political, economic and regulatory conditions in
About Yum China Holdings, Inc.
Yum China is the largest restaurant company in
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SOURCE Yum China Holdings, Inc.