Yum China Holdings (YUMC, Financial) is making waves today, climbing nearly 9% in early trading after smashing its Q3 numbers. Revenue hit a record-breaking $3.07 billion, up 5% from last year, and same-store transactions notched a seventh consecutive quarter of growth. This powerhouse in China's fast-food scene opened 438 new stores, inching closer to a jaw-dropping 15,900 locations, with franchisees shouldering a significant portion of the expansion. Profits followed suit, with operating profit jumping 15% and earnings per share rocketing by 33%, proving Yum China knows how to play the long game.
CEO Joey Wat didn't mince words on the strategy that's driving these results. With delivery sales making up a solid 40% of sales for KFC and Pizza Hut, and a string of fresh menu offerings hitting the right notes with consumers, Wat said efficiency gains are fueling growth while making room for new customer-centric models like KCOFFEE Cafes and Pizza Hut WOW stores. These moves are pulling in a wider range of customers, capturing demand in places both urban and remote, while Yum China's innovative approach keeps the brand ahead in an ever-competitive landscape.
And for investors? There's more on the table. Yum China is going all in on shareholder value, announcing a massive 50% boost in capital returns to $4.5 billion by 2026. Plans to speed up franchise openings across underserved areas underscore the company's confidence in both its cash flow and growth potential. This blend of aggressive expansion and shareholder rewards makes Yum China a clear front-runner in China's evolving consumer market, with today's stock movement signaling that investors are taking notice.
