Yum China reports sales boost driven by new restaurant growth
Total system sales grew 4% year-on-year.
Yum China reported a total system sales growth of 4% year-on-year, excluding foreign currency translation ("F/X"), driven by sales from its new restaurant openings, according to its unaudited third-quarter results.
Total store count reached 15,861 as of 30 September 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.
Meanwhile, total revenues increased 5% YoY to $3.07b, an all-time quarter high. 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 $371m. Core operating profit1 grew 18% YoY.
"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,” Joey Wat, CEO of Yum China,” Joey Wat, CEO of Yum China said.
Wat added that they are currently focused on opening more restaurants in remote locations as well as lower-tier cities beyond their reach. Wat said they expect 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 $3b to $4.5b between 2024 and 2026,” Wat said.
