Yum China Holdings, Inc. reported strong unaudited financial results for the third quarter ended September 30, 2024. The company achieved a 5% year-over-year revenue increase to $3.07 billion, surpassing the consensus estimate of $3.05 billion.
Adjusted diluted earnings per share reached $0.77, exceeding the street view of $0.68, representing a 31% increase year-over-year. Operating profit grew by 15% to $371 million, and core operating profit increased by 18%, with diluted EPS rising 33%.
The company's operating profit margin expanded by 100 basis points, and restaurant margin improved year-over-year on a comparable basis. System sales rose 4% year-over-year, excluding currency effects, driven by a 7% contribution from net new units, and same-store transactions grew for the seventh consecutive quarter.
Yum China announced a significant increase in its capital return plan, committing to return $4.5 billion to shareholders between 2024 and 2026, a 50% increase from the previous target of $3 billion. This plan is supported by the company's strong cash-generating capabilities.
KFC's system sales grew 6% excluding foreign exchange impact, while Pizza Hut's system sales increased 2% excluding foreign exchange impact. The company also noted that KCOFFEE Cafes reached 500 locations and Pizza Hut WOW stores reached 150 locations, demonstrating successful expansion of breakthrough business models.
Yum China plans to accelerate franchise store openings, with the franchise mix of net new stores expected to gradually increase to 40-50% for KFC and 20-30% for Pizza Hut over the next few years. The company's targets for the 2024 fiscal year remain unchanged.
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