Yum China Holdings Inc (NYSE:YUMC)
$ 47.89 -1.34 (-2.72%) Market Cap: 18.18 Bil Enterprise Value: 18.84 Bil PE Ratio: 21.19 PB Ratio: 3.03 GF Score: 88/100

Q3 2024 Yum China Holdings Inc Earnings Call Transcript

Nov 04, 2024 / 12:00PM GMT
Release Date Price: $48.3 (+7.17%)

Key Points

Positve
  • Yum China Holdings Inc (YUMC) achieved strong Q3 2024 results with a 4% year-over-year system sales growth and an 18% increase in core operating profit.
  • The company expanded its restaurant and operating profit margins year-over-year, with core OP margin rising by 140 basis points.
  • Yum China's innovative business models, such as KCOFFEE Cafe and Pizza Hut WOW, are gaining momentum and capturing new customer demand.
  • The company opened 1,200 net new stores in the first nine months of 2024 and returned over $1.2 billion to shareholders.
  • Yum China plans to increase its capital returns to shareholders by 50% to $4.5 billion from 2024 to 2026, demonstrating confidence in its cash-generating capabilities.
Negative
  • Despite strong results, Yum China Holdings Inc (YUMC) faces a challenging consumer environment with cautious spending post-holidays.
  • Pizza Hut's same-store sales were at 94% of prior year levels, indicating a need for continued strategic adjustments to drive growth.
  • The company acknowledges ongoing top-line pressure in Q4 2024, with no significant changes in consumer sentiment or macroeconomic conditions.
  • Yum China is still in the early stages of refining its Pizza Hut WOW model, which requires further operational efficiency improvements.
  • The company's increased focus on franchising may lead to lower capital expenditures but could also impact short-term return on invested capital.
Operator

(Operator Instructions) I would now like to hand the conference over to Florence Lip, Senior IR Director. Please go ahead.

Florence Lip
Yum China Holdings Inc - Senior Director of Investor Relations

Thank you, operator. Hello, everyone. Thank you for joining Yum China's third quarter 2024 earnings conference call. On today's call are our CEO, Ms. Joey Wat; and our Acting CFO, Mr. Adrian Ding. I'd like to remind everyone that our earnings call and investment materials contain forward-looking statements, which are subject to future events and uncertainties. Actual results may differ materially from these forward-looking statements.

All forward-looking statements should be considered in conjunction with the cautionary statement in our earnings release and the risk factors included in our filings with the SEC. This call also includes certain non-GAAP financial measures. You should carefully consider the comparable GAAP measures.

Reconciliation of non-GAAP and GAAP measures is included in our earnings release, which is available to the public

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