KFC bolsters Yum China's Q3 performance
Its CEO says it will continue to build on the chain’s “resilient business model”.
Despite higher chicken prices, Yum China’s performance remained strong in the third quarter, bolstered by its KFC restaurants.
The restaurant company reported KFC's same-store sales increased 3% in the quarter whilst Pizza Hut restaurant sales on the same metric were up 1%.
Total revenue gained 5% from a year earlier to US$2.32bn.
Net income increased 11% to US$223m from US$203m in the prior year, citing the increase in operating profit and mark to market gain from Yum China’s equity investment in Meituan Dianping. Operating profit specifically increased 11% year-on-year (YoY) US$300m from US$269m.
Restaurant margin was 17.7%, slightly up from 7.6% in the prior year period.
Yum China says it opened 231 new restaurants during the quarter, bringing its total store count to 8,917 across more than 1,300 cities.
“We achieved our 12th consecutive quarter of system sales growth since the spin-off,” Yum China CEO Joey Wat said.
“KFC delivered solid sales and profit growth as we strategically decreased promotion intensity to protect margins. Pizza Hut maintained positive sales momentum with a decline in margin during the quarter due to the important and necessary long-term investments in the revitalization program."
Wat says the company will continue to build on KFC’s “resilient business model”, cement Pizza Hut’s “revitalisation”, invest in its smaller brands and sharpen its digital ecosystem.
"We are cautiously optimistic about the future because we see significant growth opportunities in China, and we will focus on leveraging our competitive advantages to succeed in this dynamic environment,” she added.
More digital payments
As of 30 September, KFC’s loyalty programme had over 200 million members whilst Pizza Hut’s had over 65 million members, an increase of 55 million and 15 million YoY, respectively.
Digital payments, notably, accounted for 91% of company sales in the quarter, a 9% increase YoY.
Delivery, meanwhile, contributed to 20% of company sales in Q3, up by 3% YoY. Delivery services are now available in 1,225 cities, up from 1,063 cities.
