Press photo. /Yum China
Yum China reports 4% total system sales boost in Q2
This was attributed to the group’s effort in creating low ticket items.
Yum China reported a 4% total system sales surge in the second quarter of 2024, attributable to the group’s effort in creating value-focused deals for consumers.
Total revenues increased 1% year-on-year (YoY) to $2.68b, a record-high for the second quarter. Same-store sales reached 96% of the prior year's level. Same-store transactions grew 4% YoY. Operating profit grew 4% YoY to $266m, a record level for the second quarter. Core operating profit grew 12% YoY to $275m.
“We achieved our most profitable second quarter since the spin-off, with core operating profit growing by 12% despite challenging industry dynamics. Our sharp focus on value-for-money and innovative new products worked well, driving robust same-store transaction growth. We took proactive actions to improve operational efficiency, stabilizing restaurant margin and expanding OP margin year over year,” Joey Wat, CEO of Yum China said.
In Q1, KFC lowered its delivery fees to capture the smaller ticket segment resulting in delivery sales growing by 12% YoY. Yum China also launched the Pizza Hut WOW restaurant model, targeting solo diners, young consumers, and more value-conscious customers in a fast-casual format with lighter service.
“Our business model breakthroughs enabled us to broaden our addressable market and capture more customer occasions. Our side-by-side KCOFFEE cafe and Pizza Hut WOW store model delivered incremental sales and showed great future potential. Our new stores maintained good returns, with a consistent payback period of 2 years for KFC and an improved level of 2 to 3 years for Pizza Hut. With our industry-leading capabilities and scale, we are turning challenges to our competitive advantage. We believe that we are well positioned to capture the long-term growth opportunities in China and, ultimately, create enduring value for our shareholders,” Wat added.
