Yum China (YUMC) Q4 2024 earnings summary

Executive summary

• Achieved record revenue of $11.3 billion and operating profit of $1.2 billion for FY2024, with system sales up 5% year-over-year and 1,751 net new stores opened, ending the year with 16,395 stores.

• Q4 operating profit grew 36% year-over-year to $151 million, with net income up 18% and diluted EPS up 30%.

• Digital sales reached $9.6 billion, accounting for up to 90% of total sales, and total members surpassed 525 million.

• Eight consecutive quarters of positive same-store transaction growth, driven by operational efficiency and innovation.

• Returned $1.5 billion to shareholders in 2024, including $248 million in dividends and $1.24 billion in share repurchases.

Financial highlights

• Q4 total revenues increased 4% year-over-year to $2.6 billion; full year revenues up 3% to $11.3 billion.

• Q4 operating profit was $151 million, up 35–36% year-over-year; net income $115 million, up 17–18%.

• Restaurant margin in Q4 was 12.3%, up 140–160 bps year-over-year; full year restaurant margin at 15.7%.

• Diluted EPS up 18–22% for the year; Q4 diluted EPS up 30% year-over-year.

• Free cash flow of $714 million in 2024; ended year with $2.8 billion in net cash.

Outlook and guidance

• Targeting 1,600–1,800 net new stores in 2025, with capital expenditure expected at $700–800 million.

• On track to reach 20,000 stores by 2026, leveraging flexible models and digitalization.

• Plans to return $3 billion to shareholders in 2025–2026, with franchise mix of net new stores expected to rise to 40–50% for KFC and 20–30% for Pizza Hut.

• Expect core OP margin to remain stable or slightly improve in 2025; G&A as % of revenue to slightly decrease.

• Confident in positive same-store transaction index for Q1 2025, aiming to outperform the industry.