Yum China Holdings, Inc. (NYSE:YUMC) reported second-quarter adjusted earnings per share of 58 cents, beating the analyst consensus estimate of 57 cents.
Quarterly sales of $2.787 billion missed the Street view of $2.79 billion.
Total revenues increased 4% year-over-year, with a 4% increase excluding the impact of foreign exchange.
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A 22% year-over-year increase was recorded in delivery sales, which accounted for approximately 45% of total company sales.
Digital sales were reported at $2.4 billion, with digital ordering comprising roughly 94% of total company sales.
Savings in food and paper costs helped drove a quarterly restaurant margin of 16.1%, up 60 basis points year-over-year.
The company opened 336 net new stores in the quarter. Franchisees opened 89 net new stores, accounting for 26%.
As of June 30, a total of 16,978 stores was reached. Among these, 12,238 KFC stores and 3,864 Pizza Hut stores were included.
Operating profit increased by 14% year-over-year to $304 million, marking a second-quarter record high. Core operating profit was likewise increased by 14% year-over-year.
An operating margin of 10.9% was achieved, up 100 basis points year-over-year. This second-quarter record high margin was supported by restaurant margin expansion and G&A savings.
“We are also fortifying our end-to-end digitalization to streamline operations and elevate our customer experience,” Yum China CEO Joey Wat said.
Effective Aug. 6, Zhe (David) Wei was appointed to Yum China’s Board of Directors, expanding its membership to 13, including 11 independent directors.
As a Alibaba Group Holding Limited (NYSE:BABA) veteran and founding partner of Vision Knight Capital, he brings extensive leadership in global consumer sectors and digital e-commerce.
His deep expertise is expected to bolster Yum China’s strategic focus on operational efficiency, innovation, and long-term shareholder value.
Dividend: The company declared a cash dividend of 24 cents per share on Yum China’s common stock, payable on Sept. 23 to shareholders of record as of the close of business on Sept. 2.
Outlook: The company plans to return $3 billion to shareholders between 2025 and 2026, in addition to the $1.5 billion it delivered to shareholders in 2024.
The company said it targets approximately 1,600 to 1,800 net new stores in 2025.
Yum China sees capital expenditures in the range of approximately $600 million to $700 million for the 2025 fiscal year, revised down from the initial target of $700 million to $800 million, mainly due to lower capital expenditures per store.
Price Action: YUMC shares are trading down by 3.9% to $47.01 at last check Tuesday.
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