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Yum China (YUMC) Q1 Earnings and Revenues Surpass Estimates
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Yum China Holdings, Inc. (YUMC - Free Report) reported impressive first-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside can be attributed to robust total system sales growth and new unit contribution.
Earnings & Revenue Discussion
In first-quarter 2024, the company reported adjusted earnings per share (EPS) of 71 cents, beating the Zacks Consensus Estimate of 66 cents. The bottom line moved up 2.9% from 69 cents reported a year ago.
Quarterly revenues of $2.96 billion outpaced the consensus mark of $2.94 billion. The top line inched up 1% on a year-over-year basis. Excluding foreign currency translation, revenues increased 7% year over year.
Total system sales increased 6% year over year. The upside can be attributed to the net new unit contribution of 8%. System sales at KFC and Pizza Hut increased 7% and 4% (excluding foreign currency translation), respectively.
During the quarter, YUMC's same-store sales reached 97% of the previous year's level, despite strong performance in the same period last year.
Operating Highlights
In first-quarter 2024, total costs and expenses amounted to $2.6 billion compared with $2.5 billion reported in the prior-year quarter. Our model suggested the metric at $2.5 billion.
The restaurant margin was 17.6% compared with 20.3% a year ago. The downside was due to increased value-for-money offerings to drive traffic and wage inflation, which was partially offset by favorable commodity prices.
During the quarter, adjusted operating profit totaled $374 million compared with $419 million a year ago. Adjusted net income amounted to $287 million compared with $292 million in the prior-year quarter.
Balance Sheet
As of Mar 31, cash and cash equivalents were $883 million compared with $1.13 billion as of Dec 31, 2023. Inventories were $345 million compared with $424 million as of Dec 31, 2023.
In the first quarter, YUMC repurchased nearly 16.6 million shares for $681 million. As of Mar 31, the company had $853 million available for the buyback program.
Management declared a quarterly cash dividend of 16 cents per common share. The dividend will be payable on Jun 18 to shareholders of record as of May 28.
Unit Development and Other Updates
In first-quarter 2024, Yum China opened 378 net new stores. As of Mar 31, the total restaurant count reached 15,022.
In the quarter under review, Yum China’s delivery contributed 39% to KFC and 37% to Pizza Hut's company sales.
Digital orders contributed 89% to KFC and Pizza Hut's company sales, in line with the previous-year quarter’s levels. Loyalty programs of KFC and Pizza Hut led to year-over-year growth by increasing to more than 485 million members.
Retained 2024 Outlook
Yum China still projects 1,500-1,700 new store openings this year. Management continues to project capital expendtiures between $700-$850 million. reaffirmed its 2024 view. Management expects to open 1,500-1,700 new stores in 2024. Capital expenditures in 2024 are projected to be between $700-$850 million.
Domino's Pizza, Inc. (DPZ - Free Report) reported impressive first-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased from the prior-year quarter’s figure.
During the quarter, the company reported benefits from the Hungry for MORE strategy, registering heightened sales, expanding store presence and increasing profits. It reported solid growth in the United States, backed by positive order counts in carryout and delivery segments. The updated Domino's Rewards loyalty program also contributed positively.
Chipotle Mexican Grill, Inc. (CMG - Free Report) released first-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, the company reported benefits from enhanced throughput and effective marketing initiatives like Braised Beef Barbacoa and Chicken Al Pastor, leading to strong sales and transaction growth.
The Lovesac Company (LOVE - Free Report) reported mixed results in fourth-quarter fiscal 2024 (ended Feb 4, 2024), with earnings and net sales missing the Zacks Consensus Estimate. However, the metrics increased on a year-over-year basis.
This strong performance is attributed to the company's focus on strengthening its unique omnichannel infinity flywheel, reinforcing its designed-for-life platform, investing in genuine innovation and making strategic investments to scale the business profitably.
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Yum China (YUMC) Q1 Earnings and Revenues Surpass Estimates
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive first-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside can be attributed to robust total system sales growth and new unit contribution.
Earnings & Revenue Discussion
In first-quarter 2024, the company reported adjusted earnings per share (EPS) of 71 cents, beating the Zacks Consensus Estimate of 66 cents. The bottom line moved up 2.9% from 69 cents reported a year ago.
Quarterly revenues of $2.96 billion outpaced the consensus mark of $2.94 billion. The top line inched up 1% on a year-over-year basis. Excluding foreign currency translation, revenues increased 7% year over year.
Yum China Price, Consensus and EPS Surprise
Yum China price-consensus-eps-surprise-chart | Yum China Quote
Total system sales increased 6% year over year. The upside can be attributed to the net new unit contribution of 8%. System sales at KFC and Pizza Hut increased 7% and 4% (excluding foreign currency translation), respectively.
During the quarter, YUMC's same-store sales reached 97% of the previous year's level, despite strong performance in the same period last year.
Operating Highlights
In first-quarter 2024, total costs and expenses amounted to $2.6 billion compared with $2.5 billion reported in the prior-year quarter. Our model suggested the metric at $2.5 billion.
The restaurant margin was 17.6% compared with 20.3% a year ago. The downside was due to increased value-for-money offerings to drive traffic and wage inflation, which was partially offset by favorable commodity prices.
During the quarter, adjusted operating profit totaled $374 million compared with $419 million a year ago. Adjusted net income amounted to $287 million compared with $292 million in the prior-year quarter.
Balance Sheet
As of Mar 31, cash and cash equivalents were $883 million compared with $1.13 billion as of Dec 31, 2023. Inventories were $345 million compared with $424 million as of Dec 31, 2023.
In the first quarter, YUMC repurchased nearly 16.6 million shares for $681 million. As of Mar 31, the company had $853 million available for the buyback program.
Management declared a quarterly cash dividend of 16 cents per common share. The dividend will be payable on Jun 18 to shareholders of record as of May 28.
Unit Development and Other Updates
In first-quarter 2024, Yum China opened 378 net new stores. As of Mar 31, the total restaurant count reached 15,022.
In the quarter under review, Yum China’s delivery contributed 39% to KFC and 37% to Pizza Hut's company sales.
Digital orders contributed 89% to KFC and Pizza Hut's company sales, in line with the previous-year quarter’s levels. Loyalty programs of KFC and Pizza Hut led to year-over-year growth by increasing to more than 485 million members.
Retained 2024 Outlook
Yum China still projects 1,500-1,700 new store openings this year. Management continues to project capital expendtiures between $700-$850 million. reaffirmed its 2024 view. Management expects to open 1,500-1,700 new stores in 2024. Capital expenditures in 2024 are projected to be between $700-$850 million.
Zacks Rank
Yum China currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
Domino's Pizza, Inc. (DPZ - Free Report) reported impressive first-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased from the prior-year quarter’s figure.
During the quarter, the company reported benefits from the Hungry for MORE strategy, registering heightened sales, expanding store presence and increasing profits. It reported solid growth in the United States, backed by positive order counts in carryout and delivery segments. The updated Domino's Rewards loyalty program also contributed positively.
Chipotle Mexican Grill, Inc. (CMG - Free Report) released first-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, the company reported benefits from enhanced throughput and effective marketing initiatives like Braised Beef Barbacoa and Chicken Al Pastor, leading to strong sales and transaction growth.
The Lovesac Company (LOVE - Free Report) reported mixed results in fourth-quarter fiscal 2024 (ended Feb 4, 2024), with earnings and net sales missing the Zacks Consensus Estimate. However, the metrics increased on a year-over-year basis.
This strong performance is attributed to the company's focus on strengthening its unique omnichannel infinity flywheel, reinforcing its designed-for-life platform, investing in genuine innovation and making strategic investments to scale the business profitably.