YUMC surge on Q3 Earnings, increase shareholder returns by 50%
$Yum China Holdings, Inc.(YUMC)$ $YUM CHINA(09987)$ Jumped over 9% after Q3 earnings report, which can't be separated from the excellent performance of KFC, Pizza Hut and other restaurants in China.Of course, the company's further enhancement of shareholder returns also gave investors increased confidence in their holdings.
Financial Performance Overview
Revenue: Total revenue for the third quarter reached $3.07 billion, up 5.5% year-on-year and up 4% excluding the impact of foreign exchange fluctuations, beating market expectations of $3.05 billion.It was also the seventh consecutive quarter of positive growth.
This quarter's record performance demonstrates its ability to maintain growth in a highly competitive market.
Among them
KFC revenues reached $2.31 billion, up year-over-year, with a margin of 18.3%;
Pizza Hut stores at $615 million, up year-over-year, with a margin of 12.8%
Other brands had a margin of -13.2%
On the other hand, however, same-store sales growth was about -3%, also the second consecutive quarterly decline, but better than market expectations of -7%.
The company's overall core operating profit rose 12.8% year-on-year, beating market expectations of 11.5%
Performance Analysis
Store Expansion Plans: The Company continues to expand its store network and plans to open more new stores in the coming quarters, especially in Tier 2 and Tier 3 cities.
Innovative products and menu optimization: the Company continues to introduce new products to meet the diversified needs of consumers, especially in the area of healthy and convenient food products
Digital transformation: the Company's investments in digitalization have also yielded significant results.Customers' dining experience has been enhanced through enhanced online ordering and delivery services, especially against the backdrop of increased consumer demand for takeaway and online ordering in the wake of the outbreak.
Customer Loyalty: Loyalty programs and promotions were used to attract repeat customers.These measures have been effective in increasing the repeat purchase rate of customers.
Market Feedback
The company has announced a new shareholder return program that will increase the amount it will spend on share buybacks and dividends to $4.5 billion between 2024 and 2026, a 50 percent increase on the previously announced $3 billion program.
Yum China's cumulative shareholder returns have exceeded $4 billion since it first went public in the U.S. in 2016. in the first nine months of 2024, the company has returned $1.24 billion to shareholders, nearly triple the amount in the same period last year.
Yum China's stock has been a strong performer in trading following the earnings report, reflecting the market's optimism about its future growth prospects.
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