Yum China Reports Fourth Quarter Results, Increases Dividend by 23% and Steps Up 2024 Share Repurchases to $1.25 billion
02/06/2024 at 4:30 PM EST

Fourth Quarter System Sales Up 21%, Operating Profit Up 170% and Core Operating Profit Grew 324% (1)
Full Year System Sales Up 21%, Operating Profit Up 76% to $1.1 Billion and Core Operating Profit Grew 79%
Record 2023 Results - Total Revenues of $11 Billion, Adjusted Operating Profit of $1.1 Billion and 1,697 Net New Stores Opened
14,644 Stores in Over 2,000 Cities

SHANGHAI, Feb. 6, 2024 /PRNewswire/ -- Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the fourth quarter and year ended December 31, 2023.

 Fourth Quarter Highlights

  • Total system sales grew 21% year over year excluding foreign currency translation ("F/X"). Growth was mainly attributable to 12% net new unit contribution(2), 4% same-store sales growth and lapping temporary closures from the pandemic in the prior year.
  • Opened 542 net new stores in the fourth quarter. Total stores reached 14,644 as of December 31, 2023. KFC reached 10,296 stores and Pizza Hut reached 3,312 stores.
  • Total revenues increased 19% to $2.49 billion, or 21% excluding F/X.
  • Operating profit grew 170% to $110 million. Core operating profit grew 324%.
  • Restaurant margin expanded to 10.7%. Excluding items affecting comparability at the restaurant level – the impact from temporary relief and VAT deduction benefits in both years, restaurant margin expanded 170 basis points.
  • Diluted EPS increased 77% to $0.23. Excluding Special Items as well as unfavorable impacts of $0.01 from F/X and $0.04 from the mark-to-market investment in Meituan, the increase was 164%.
  • Foreign currency translation unfavorably impacted total revenues by $36 million, operating profit by $2 million and diluted EPS by $0.01.

Full Year Highlights

  • Total system sales grew 21% excluding F/X. Growth was mainly attributable to 9% net new unit contribution, 7% same-store sales growth and lapping temporary closures from the pandemic in the prior year.
  • Store count increased 13%, or 1,697 net new stores, exceeding the full-year net new store target.
  • Total revenues were up 15% to $10.98 billion, or 21% excluding F/X.
  • Operating profit grew 76% to $1.1 billion. Core operating profit grew 79%.
  • Restaurant margin expanded to 16.3%. Excluding items affecting comparability at the restaurant level, restaurant margin expanded 270 basis points.
  • Diluted EPS increased 89% to $1.97. Excluding Special Items as well as unfavorable impacts of $0.11 from F/X and $0.04 from the mark-to-market investment in Meituan, the increase was 101%.
  • Foreign currency translation unfavorably impacted total revenues by $589 million, operating profit by $61 million and diluted EPS by $0.11.
  • Shareholder returns through share repurchases and cash dividends increased 25% to $833 million.
  • Digital sales(3) exceeded $9.2 billion, with digital ordering accounted for approximately 89% of total company sales.
  • Total membership of KFC and Pizza Hut exceeded 470 million, up 14% versus the prior year. Member sales accounted for approximately 65% of KFC and Pizza Hut's system sales in the aggregate.

(1) Core Operating Profit is defined as Operating Profit adjusted for Special Items, further excluding items affecting comparability and the impact of F/X. The Company uses Core Operating Profit for the purposes of evaluating the performance of its core operations. Please refer to "Reconciliation of Reported GAAP Results to Non-GAAP Measures" included in the accompanying tables of this release for further details.

(2) Net new unit contribution refers to sales contribution from net new stores.

(3) Digital sales refer to sales at company-owned stores where orderings were placed digitally.

Increasing Dividends and Stepping Up Share Repurchases

  • Yum China returned approximately $390 million to shareholders in the fourth quarter and $833 million for the full year through share repurchases and cash dividends. This stands as the highest full year return thus far in the Company's history.
  • During the fourth quarter, the Company stepped up share repurchases, totaling 7.5 million shares of common stock for $336 million. In 2023 the Company repurchased 12.4 million shares, equivalent to about 3% of its total outstanding shares. As of December 31, 2023, approximately $1.5 billion remained available for future share repurchases under the current authorization program.
  • The Company plans to significantly accelerate the return of value to its shareholders in 2024:
    - The board declared a 23% increase in cash dividend to $0.16 per share on Yum China's common stock, payable on March 26, 2024 to shareholders of record as of the close of business on March 5, 2024.
    - The Company plans to repurchase $1.25 billion of its common stock in 2024, through open market transactions in the U.S. and Hong Kong. This includes two primary components: (i) an aggregate repurchase amount of $750 million in 2024 under the Rule 10b5-1 of the United States Securities Exchange Act of 1934 (the "Exchange Act") in the U.S. and a similar program in Hong Kong; and (ii) an aggregate repurchase amount of $500 million in the first quarter of 2024 under the Rule 10b-18 of the Exchange Act in the U.S. and through similar transactions in Hong Kong.

Key Financial Results

 

Fourth Quarter

     

Full Year

 
             

%/ppts Change

                 

%/ppts Change

 
 

2023

   

2022

   

Reported

   

Ex F/X

     

2023

   

2022

   

Reported

   

Ex F/X

 

System Sales Growth (4) (%)

 

21

     

(4)

   

NM

   

NM

       

21

     

(5)

   

NM

   

NM

 

Same-Store Sales Growth (4) (%)

 

4

     

(4)

   

NM

   

NM

       

7

     

(7)

   

NM

   

NM

 

Operating Profit ($mn)

 

110

     

41

     

+170

     

+175

       

1,106

     

629

     

+76

     

+86

 

Adjusted Operating Profit (5) ($mn)

 

116

     

40

     

+193

     

+199

       

1,121

     

633

     

+77

     

+87

 

Core Operating Profit (5) (6) ($mn)

 

111

     

29

   

NM

     

+324

       

1,121

     

627

   

NM

     

+79

 

Net Income ($mn)

 

97

     

53

     

+81

     

+84

       

827

     

442

     

+87

     

+97

 

Adjusted Net Income (5) ($mn)

 

103

     

52

     

+96

     

+100

       

842

     

446

     

+89

     

+99

 

Diluted Earnings
  Per Common Share ($)

 

0.23

     

0.13

     

+77

     

+85

       

1.97

     

1.04

     

+89

     

+100

 

Adjusted Diluted Earnings
  Per Common Share (5) ($)

 

0.25

     

0.13

     

+92

     

+92

       

2.00

     

1.05

     

+90

     

+101

 

(4) System sales and same-store sales percentages exclude the impact of F/X. Effective January 1, 2018, temporary store closures are normalized in the same-store sales calculation by excluding the period during which stores are temporarily closed.

(5) See "Reconciliation of Reported GAAP Results to Non-GAAP Measures" included in the accompanying tables of this release for further details.

(6)  Current period amounts are derived by translating results at average exchange rates of the prior year period.

Note:  All comparisons are versus the same period a year ago.

Percentages may not recompute due to rounding.

NM refers to not meaningful.

CEO Comments 

Joey Wat, CEO of Yum China, commented, "2023 was a pivotal year for Yum China. Not only did we demonstrate strong resilience during the pandemic, but we also seized opportunities that arose from China's reopening. In 2023, our system sales grew by 21%, surpassing the industry's growth rate, and we set new records for both revenue and profits. Our return to shareholders through cash dividends and share repurchases in 2023 was the highest since spinoff. Looking ahead, we remain very positive about the vast growth opportunities in China. Currently serving just one-third of China's population, our ambitious goal is to extend our reach to half of the population by 2026. Over half of our new stores are located in lower-tier cities, strategically positioned to capture the demand from long-term consumption upgrades there. We are also expanding our addressable market and capturing incremental sales across city tiers with innovative products, engaging campaigns and a wider range of price points. Leveraging our distinctive strengths, including brands deeply ingrained in China, remarkable agility and robust operational execution, we are well-positioned to achieve our growth targets for 2024-2026 and deliver excellent returns to our shareholders through increased cash dividends and stepped-up share buybacks."

KFC

 

Fourth Quarter

 

Full Year

 
             

%/ppts Change

             

%/ppts Change

 
 

2023

   

2022

   

Reported

   

Ex F/X

 

2023

   

2022

   

Reported

   

Ex F/X

 

Restaurants

 

10,296

     

9,094

     

+13

   

NM

   

10,296

     

9,094

     

+13

   

NM

 

System Sales Growth (%)

 

20

     

(1)

   

NM

   

NM

   

20

     

(4)

   

NM

   

NM

 

Same-Store Sales Growth (%)

 

3

     

(3)

   

NM

   

NM

   

7

     

(7)

   

NM

   

NM

 

Total Revenues ($mn)

 

1,872

     

1,591

     

+18

     

+19

   

8,240

     

7,219

     

+14

     

+20

 

Operating Profit ($mn)

 

167

     

117

     

+43

     

+45

   

1,202

     

787

     

+53

     

+60

 

Core Operating Profit ($mn)

 

164

     

115

   

NM

     

+43

   

1,211

     

806

   

NM

     

+50

 

Restaurant Margin (%)

 

12.0

     

12.7

     

(0.7)

     

(0.7)

   

17.7

     

15.7

     

+2.0

     

+2.0

 
  • System sales for KFC grew 20% for the quarter and the year, primarily driven by net new unit contribution of 12% and 9%, respectively, 3% increase in same-store sales for the quarter and 7% increase for the year, as well as lapping temporary closures in the prior year.
  • KFC opened a record 1,202 net new stores in 2023 and reached 10,296 stores at year-end 2023.
  • Operating profit of $1.2 billion reached a record level with increases of 43% for the quarter and 53% for the year.
  • Restaurant margin was 12.0% for the quarter. Excluding items affecting comparability at the restaurant level, restaurant margin expanded 60 basis points, primarily due to sales leveraging, which was partially offset by higher promotion costs and wage inflation. Full-year restaurant margin was 17.7%. Excluding items affecting comparability at the restaurant level, restaurant margin expanded 240 basis points, primarily driven by sales leveraging and favorable commodity prices, partially offset by higher promotion costs and wage inflation.
  • Delivery contributed approximately 38% of KFC's Company sales for the quarter and 36% for the year. Off-premise contributed approximately 66% for the full year 2023, compared to 69% in 2022. Dine-in significantly rebounded in 2023 compared to the pandemic-impacted prior year.

Pizza Hut

 

Fourth Quarter

 

Full Year

 
             

%/ppts Change

             

%/ppts Change

 
 

2023

   

2022

   

Reported

   

Ex F/X

 

2023

   

2022

   

Reported

   

Ex F/X

 

Restaurants

 

3,312

     

2,903

     

+14

   

NM

   

3,312

     

2,903

     

+14

   

NM

 

System Sales Growth (%)

 

24

     

(6)

   

NM

   

NM

   

20

     

(3)

   

NM

   

NM

 

Same-Store Sales Growth (%)

 

6

     

(8)

   

NM

   

NM

   

6

     

(6)

   

NM

   

NM

 

Total Revenues ($mn)

 

496

     

404

     

+23

     

+24

   

2,246

     

1,960

     

+15

     

+21

 

Operating Profit ($mn)

 

5

     

(20)

   

NM

   

NM

   

142

     

70

     

+102

     

+117

 

Core Operating Profit ($mn)

 

4

     

(27)

   

NM

   

NM

   

143

     

48

   

NM

     

+198

 

Restaurant Margin (%)

 

7.3

     

1.9

     

+5.4

     

+5.4

   

11.8

     

9.2

     

+2.6

     

+2.6

 
  • System sales for Pizza Hut grew 24% for the quarter and 20% for the year, primarily driven by net new unit contribution of 12% for the quarter and 10% for the year, a 6% increase in same-store sales and lapping temporary closures in the prior year.
  • Pizza Hut accelerated new store openings in 2023 with a record 409 net new stores. Total stores reached 3,312 at year-end 2023.
  • Operating profit increased to $5 million for the quarter, compared with an operating loss of $20 million in the prior year period. For the year, operating profit was $142 million, representing 102% growth.
  • Restaurant margin for the quarter was 7.3%. Excluding items affecting comparability at the restaurant level, restaurant margin expanded 680 basis points, primarily driven by sales leveraging, labor productivity gain, and lower rider cost. For the full year, restaurant margin was 11.8%. Excluding items affecting comparability at the restaurant level, restaurant margin expanded 330 basis points from the prior year, primarily driven by sales leveraging and favorable commodity prices, which was partially offset by wage inflation and higher promotion costs.
  • Delivery contributed approximately 40% of Pizza Hut's Company sales for the quarter and 37% for the year. Off-premise contributed approximately 46% for the year, compared to 52% in 2022, significantly above pre-pandemic 2019 level of 30%.

Outlook

In 2024, Yum China plans to

  • Open approximately 1,500 to 1,700 net new stores.
  • Make capital expenditures in the range of approximately $700 million to $850 million.

 From 2024 to 2026, Yum China targets to

  • Reach a total store count of 20,000 by 2026.
  • Achieve a high-single-to-double-digit CAGR for system sales and operating profit, and a double-digit CAGR for EPS, using 2023 as the base year excluding F/X.
  • Return a minimum of $3 billion to shareholders through quarterly dividends and share repurchases.

Other Updates

  • Yum China was ranked number one globally for the Restaurant & Leisure Facilities Industry in the S&P Global 2023 Corporate Sustainability Assessment, reflecting its unwavering commitment to environmental, social, and governance. 2023 marked the fourth consecutive year that Yum China was selected as a member of both the Dow Jones Sustainability Indices: World Index and Emerging Market Index.
  • Yum China was once again named by Top Employers Institute as a Top Employer in China for the sixth consecutive year. Yum China was first in the restaurant industry. This latest recognition underscores the Company's continued dedication to providing an exceptional working environment and experience for its people.
  • Yum China has been named to the Fortune World's Most Admired Companies list for 2024, ranked #5 in the food service industry.

Note on Non-GAAP Measures

Reported GAAP results include items that are excluded from non-GAAP measures. See "Reconciliation of Reported GAAP Results to Non-GAAP Measures" and "Segment Results" within this release for non-GAAP reconciliation details.

Conference Call

Yum China's management will hold an earnings conference call at 7:00 p.m. U.S. Eastern Time on Tuesday, February 6, 2024 (8:00 a.m. Beijing/Hong Kong Time on Wednesday, February 7, 2024).

A live webcast of the call may be accessed at https://edge.media-server.com/mmc/p/rav3hcwk.

To join by phone, please register in advance of the conference through the link provided below. Upon registering, you will be provided with participant dial-in numbers, a passcode and a unique access PIN.

Pre-registration link: https://s1.c-conf.com/diamondpass/10035579-wp1ljg.html

A replay of the conference call will be available one hour after the call ends until Wednesday, February 14, 2024 and may be accessed by phone using the following numbers:

U.S.:

1 855 883 1031

Mainland China:

400 1209 216

Hong Kong:

800 930 639

U.K.:

0800 031 4295

   

Replay PIN:

10035579

Additionally, this earnings release, the accompanying slides, as well as the live and archived webcast of this conference call will be available at Yum China's Investor Relations website at http://ir.yumchina.com

For important news and information regarding Yum China, including our filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange, visit Yum China's Investor Relations website at http://ir.yumchina.com. Yum China uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including under "2024 Outlook." We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as "expect," "expectation," "believe," "anticipate," "may," "could," "intend," "belief," "plan," "estimate," "target," "predict," "project," "likely," "will," "continue," "should," "forecast," "outlook," "commit" or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements include, without limitation, statements regarding the future strategies, growth, business plans, investments, store openings, capital expenditures, dividend and share repurchase plans, CAGR for system sales, operating profit and EPS, earnings, performance and returns of Yum China, anticipated effects of population and macroeconomic trends, pace of recovery of Yum China's business, the anticipated effects of our innovation, digital and delivery capabilities and investments on growth and beliefs regarding the long-term drivers of Yum China's business. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks and uncertainties that are difficult to predict and could cause our actual results or events to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or assumptions will be achieved. The forward-looking statements included in this press release are only made as of the date of this press release, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. Numerous factors could cause our actual results or events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to achieve development goals at the times and in the amounts currently anticipated, if at all, the success of our marketing campaigns and product innovation, our ability to maintain food safety and quality control systems, changes in public health conditions, including the COVID-19 pandemic, our ability to control costs and expenses, including tax costs, as well as changes in political, economic and regulatory conditions in China, and those set forth under the caption "Risk Factors" in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q). In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q) for additional detail about factors that could affect our financial and other results.

About Yum China Holdings, Inc.

Yum China is the largest restaurant company in China with a mission to make every life taste beautiful. The Company has over 400,000 employees and operates over 14,000 restaurants under six brands across 2,000 cities in China. KFC and Pizza Hut are the leading brands in the quick-service and casual dining restaurant spaces in China, respectively. Taco Bell offers innovative Mexican-inspired food. Yum China has also partnered with Lavazza to develop the Lavazza coffee concept in China. Little Sheep and Huang Ji Huang specialize in Chinese cuisine. Yum China has a world-class, digitalized supply chain which includes an extensive network of logistics centers nationwide and an in-house supply chain management system. Its strong digital capabilities and loyalty program enable the Company to reach customers faster and serve them better. Yum China is a Fortune 500 company with the vision to be the world's most innovative pioneer in the restaurant industry. For more information, please visit http://ir.yumchina.com

Investor Relations Contact:

   

Tel: +86 21 2407 7556 / +852 2267 5801

IR@YumChina.com

 

Media Contact:

   

Tel: +86 21 2407 7510

Media@YumChina.com

 

 

Yum China Holdings, Inc.

Condensed Consolidated Statements of Income

(in US$ million, except per share data)

(unaudited)

 
   

Quarter Ended

   

% Change

 

Year Ended

   

% Change

   

12/31/2023

   

12/31/2022

   

B/(W)

 

12/31/2023

   

12/31/2022

   

B/(W)

Revenues

                                       

Company sales

 

$

2,343

   

$

1,975

     

19

     

$

10,391

   

$

9,110

     

14

   

Franchise fees and income

   

20

     

16

     

24

       

89

     

81

     

11

   

Revenues from transactions with franchisees

   

90

     

68

     

32

       

372

     

287

     

30

   

Other revenues

   

40

     

29

     

37

       

126

     

91

     

39

   

Total revenues

   

2,493

     

2,088

     

19

       

10,978

     

9,569

     

15

   

Costs and Expenses, Net

                                       

Company restaurants

                                       

Food and paper

   

758

     

630

     

(20)

       

3,224

     

2,836

     

(14)

   

Payroll and employee benefits

   

678

     

570

     

(19)

       

2,725

     

2,389

     

(14)

   

Occupancy and other operating expenses

   

654

     

570

     

(15)

       

2,752

     

2,604

     

(6)

   

Company restaurant expenses

   

2,090

     

1,770

     

(18)

       

8,701

     

7,829

     

(11)

   

General and administrative expenses

   

153

     

145

     

(5)

       

638

     

594

     

(7)

   

Franchise expenses

   

8

     

7

     

(9)

       

36

     

34

     

(2)

   

Expenses for transactions with franchisees

   

86

     

67

     

(28)

       

356

     

279

     

(28)

   

Other operating costs and expenses

   

35

     

25

     

(38)

       

112

     

78

     

(43)

   

Closures and impairment expenses, net

   

12

     

12

     

5

       

29

     

32

     

11

   

Other (income) expenses, net

   

(1)

     

21

   

NM

       

     

94

     

100

   

Total costs and expenses, net

   

2,383

     

2,047

     

(16)

       

9,872

     

8,940

     

(10)

   

Operating Profit

   

110

     

41

     

170

       

1,106

     

629

     

76

   

Interest income, net

   

45

     

33

     

33

       

169

     

84

     

101

   

Investment (loss) gain

   

(17)

     

6

   

NM

       

(49)

     

(26)

     

(91)

   

Income Before Income Taxes and
  Equity in Net Earnings (Losses) from
  Equity Method Investments

   

138

     

80

     

71

       

1,226

     

687

     

78

   

Income tax provision

   

(33)

     

(24)

     

(39)

       

(329)

     

(207)

     

(59)

   

Equity in net earnings (losses) from
   equity method investments

   

2

     

2

     

9

       

4

     

(2)

   

NM

   

Net income – including noncontrolling interests

   

107

     

58

     

81

       

901

     

478

     

88

   

Net income – noncontrolling interests

   

10

     

5

     

(86)

       

74

     

36

     

(106)

   

Net Income – Yum China Holdings, Inc.

 

$

97

   

$

53

     

81

     

$

827

   

$

442

     

87

   

Effective tax rate

   

24.2

%

   

29.9

%

   

5.7

 

ppts.

   

26.9

%

   

30.1

%

   

3.2

 

ppts.

                                         

Basic Earnings Per Common Share

 

$

0.23

   

$

0.13

           

$

1.99

   

$

1.05

         

Weighted-average shares outstanding
    (in millions)

   

411

     

419

             

416

     

421

         
                                         

Diluted Earnings Per Common Share

 

$

0.23

   

$

0.13

           

$

1.97

   

$

1.04

         

Weighted-average shares outstanding
    (in millions)

   

415

     

423

             

420

     

425

         
                                         

Company sales

   

100.0

%

   

100.0

%

           

100.0

%

   

100.0

%

       

Food and paper

   

32.4

     

31.9

     

(0.5)

 

ppts.

   

31.0

     

31.1

     

0.1

 

ppts.

Payroll and employee benefits

   

29.0

     

28.8

     

(0.2)

 

ppts.

   

26.2

     

26.2

     

 

ppts.

Occupancy and other operating expenses

   

27.9

     

28.9

     

1.0

 

ppts.

   

26.5

     

28.6

     

2.1

 

ppts.

Restaurant margin

   

10.7

%

   

10.4

%

   

0.3

 

ppts.

   

16.3

%

   

14.1

%

   

2.2

 

ppts.

Operating margin

   

4.7

%

   

2.1

%

   

2.6

 

ppts.

   

10.6

%

   

6.9

%

   

3.7

 

ppts.

Percentages may not recompute due to rounding. NM refers to not meaningful.

 

 

Yum China Holdings, Inc.

KFC Operating Results

(in US$ million)

(unaudited)

 
   

Quarter Ended

   

% Change

 

Year Ended

   

% Change

   

12/31/2023

   

12/31/2022

   

B/(W)

 

12/31/2023

   

12/31/2022

   

B/(W)

Revenues

                                       

Company sales

 

$

1,842

   

$

1,566

     

18

     

$

8,116

   

$

7,120

     

14

   

Franchise fees and income

   

14

     

12

     

14

       

62

     

56

     

10

   

Revenues from transactions with franchisees

   

12

     

9

     

35

       

45

     

33

     

37

   

Other revenues

   

4

     

4

     

(15)

       

17

     

10

     

60

   

Total revenues

   

1,872

     

1,591

     

18

       

8,240

     

7,219

     

14

   

Costs and Expenses, Net

                                       

Company restaurants

                                       

Food and paper

   

598

     

496

     

(21)

       

2,512

     

2,208

     

(14)

   

Payroll and employee benefits

   

519

     

434

     

(20)

       

2,057

     

1,797

     

(14)

   

Occupancy and other operating expenses

   

504

     

437

     

(15)

       

2,107

     

1,994

     

(6)

   

Company restaurant expenses

   

1,621

     

1,367

     

(19)

       

6,676

     

5,999

     

(11)

   

General and administrative expenses

   

60

     

63

     

5

       

263

     

254

     

(4)

   

Franchise expenses

   

7

     

6

     

(8)

       

31

     

29

     

(2)

   

Expenses for transactions with franchisees

   

10

     

8

     

(32)

       

39

     

30

     

(33)

   

Other operating costs and expenses

   

4

     

3

     

(1)

       

15

     

7

     

(91)

   

Closures and impairment expenses, net

   

3

     

5

     

47

       

12

     

16

     

28

   

Other expenses, net

   

     

22

     

99

       

2

     

97

     

98

   

Total costs and expenses, net

   

1,705

     

1,474

     

(16)

       

7,038

     

6,432

     

(9)

   

Operating Profit

 

$

167

   

$

117

     

43

     

$

1,202

   

$

787

     

53

   

Company sales

   

100.0

%

   

100.0

%

           

100.0

%

   

100.0

%

       

Food and paper

   

32.5

     

31.7

     

(0.8)

 

ppts.

   

31.0

     

31.0

     

 

ppts.

Payroll and employee benefits

   

28.2

     

27.7

     

(0.5)

 

ppts.

   

25.3

     

25.2

     

(0.1)

 

ppts.

Occupancy and other operating expenses

   

27.3

     

27.9

     

0.6

 

ppts.

   

26.0

     

28.1

     

2.1

 

ppts.

Restaurant margin

   

12.0

%

   

12.7

%

   

(0.7)

 

ppts.

   

17.7

%

   

15.7

%

   

2.0

 

ppts.

Operating margin

   

9.1

%

   

7.4

%

   

1.7

 

ppts.

   

14.8

%

   

11.0

%

   

3.8

 

ppts.

Percentages may not recompute due to rounding.

 

 

Yum China Holdings, Inc.

Pizza Hut Operating Results

(in US$ million)

(unaudited)

 
   

Quarter Ended

   

% Change

 

Year Ended

   

% Change

   

12/31/2023

   

12/31/2022

   

B/(W)

 

12/31/2023

   

12/31/2022

   

B/(W)

Revenues

                                       

Company sales

 

$

486

   

$

398

     

22

     

$

2,214

   

$

1,939

     

14

   

Franchise fees and income

   

1

     

1

     

25

       

7

     

7

     

9

   

Revenues from transactions with franchisees

   

1

     

1

     

9

       

4

     

4

     

11

   

Other revenues

   

8

     

4

     

90

       

21

     

10

     

114

   

Total revenues

   

496

     

404

     

23

       

2,246

     

1,960

     

15

   

Costs and Expenses, Net

                                       

Company restaurants

                                       

Food and paper

   

155

     

131

     

(18)

       

692

     

612

     

(13)

   

Payroll and employee benefits

   

153

     

135

     

(14)

       

649

     

572

     

(14)

   

Occupancy and other operating expenses

   

141

     

125

     

(13)

       

610

     

577

     

(6)

   

Company restaurant expenses

   

449

     

391

     

(15)

       

1,951

     

1,761

     

(11)

   

General and administrative expenses

   

29

     

26

     

(11)

       

118

     

110

     

(7)

   

Franchise expenses

   

1

     

1

     

(13)

       

4

     

4

     

(8)

   

Expenses for transactions with franchisees

   

1

     

     

(11)

       

4

     

3

     

(11)

   

Other operating costs and expenses

   

8

     

3

     

(117)

       

19

     

8

     

(124)

   

Closures and impairment expenses, net

   

3

     

3

     

1

       

8

     

4

     

(135)

   

Total costs and expenses, net

   

491

     

424

     

(16)

       

2,104

     

1,890

     

(11)

   

Operating Profit

 

$

5

   

$

(20)

   

NM

     

$

142

   

$

70

     

102

   

Company sales

   

100.0

%

   

100.0

%

           

100.0

%

   

100.0

%

       

Food and paper

   

32.0

     

32.9

     

0.9

 

ppts.

   

31.3

     

31.5

     

0.2

 

ppts.

Payroll and employee benefits

   

31.7

     

33.9

     

2.2

 

ppts.

   

29.3

     

29.5

     

0.2

 

ppts.

Occupancy and other operating expenses

   

29.0

     

31.3

     

2.3