Latest news with #JoeyWat
Yahoo
08-07-2025
- Business
- Yahoo
Yum China Pilots AI Assistant for Restaurant Management
Yum China Holdings Inc. (NYSE:YUMC) is one of the most undervalued large cap stocks to buy according to analysts. On June 20, Yum China commenced a pilot program for Q-Smart, which is an AI-enabled assistant designed for enhanced restaurant management. The tool is currently undergoing trials at select KFC outlets. Q-Smart offers support for daily operational tasks, like inventory management and labor scheduling. The system uses natural language processing to enable direct voice commands and facilitates hands-free interactions through wearable devices like wireless earphones and smartwatches. The iconic yellow and red roof of a franchise restaurant in the bustling streets of a city. The Q-Smart launch was unveiled at Yum China's first-ever AI Day event in Shanghai on the said date. During the event, the CEO of the company, Joey Wat, announced the establishment of a 100 million yuan (~$13.9 million) Frontline Innovation Fund, which aims to support frontline restaurant employees and fuel technological innovation, like making the 'All-Staff Hackathon,' launched in March this year with ~200 participating teams. Yum China Holdings Inc. (NYSE:YUMC) owns, operates, and franchises restaurants in China. While we acknowledge the potential of YUMC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the . READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
13-05-2025
- Business
- Yahoo
YUMC Q1 Earnings Call: Flat Sales Amid Consumer Headwinds and Store Expansion in China
Fast-food company Yum China (NYSE:YUMC) fell short of the market's revenue expectations in Q1 CY2025, with sales flat year on year at $2.98 billion. Its non-GAAP profit of $0.77 per share was in line with analysts' consensus estimates. Is now the time to buy YUMC? Find out in our full research report (it's free). Revenue: $2.98 billion vs analyst estimates of $3.1 billion (flat year on year, 3.7% miss) Adjusted EPS: $0.77 vs analyst estimates of $0.78 (in line) Adjusted EBITDA: $514 million vs analyst estimates of $538.7 million (17.2% margin, 4.6% miss) Operating Margin: 13.4%, in line with the same quarter last year Free Cash Flow Margin: 10.6%, up from 8.6% in the same quarter last year Locations: 16,642 at quarter end, up from 15,022 in the same quarter last year Same-Store Sales were flat year on year (-3% in the same quarter last year) Market Capitalization: $17.15 billion Yum China's first-quarter results reflected flat year-over-year sales, with management attributing performance to increased operational efficiency and ongoing product innovation across its KFC and Pizza Hut brands. CEO Joey Wat discussed the company's ability to sustain transaction growth, noting that menu enhancements and wider price ranges helped maintain customer engagement despite a challenging consumer environment. The company also expanded its store count, focusing on smaller formats and penetration into lower-tier cities. Looking forward, management emphasized a cautious approach to guidance, citing a complex and evolving market backdrop. The company reiterated its aim for mid-single-digit system sales growth over the year while prioritizing value, operational simplification, and efficiency gains. CFO Adrian Ding stated that the focus remains on controlling costs and leveraging automation to offset wage inflation and delivery-related expenses, with no material impact anticipated from tariffs due to local sourcing. Yum China's leadership provided additional color on the factors shaping quarterly results and future priorities, highlighting how product innovation, cost control, and strategic expansion underpinned operating performance in Q1. Menu innovation and value focus: KFC introduced new spicy versions of its flagship chicken and expanded seasonal offerings, while Pizza Hut's refreshed menu targeted affordability and operational simplicity. These actions were designed to attract new traffic and improve restaurant margins. Delivery growth and digital channels: Both KFC and Pizza Hut saw double-digit year-over-year growth in delivery transactions, with management noting that over 70% of sales remain outside third-party platforms, preserving margin control and customer relationships. Smaller store formats and market reach: The company continued to grow its footprint, with 70–80% of new stores built in smaller formats for lower-tier cities. This approach enables faster expansion and lower capital investment while maintaining healthy payback periods. Operational efficiency through automation: Initiatives like Project Red Eye and Project Fresh Eye have streamlined kitchen operations, simplified menus, and centralized processes, driving cost savings and supporting stable margins despite rising delivery and labor costs. Brand marketing and customer engagement: Yum China leveraged collaborations with popular intellectual properties (IPs) and new brand concepts such as KCOFFEE Cafes and Pizza Hut WOW stores to broaden its customer base, especially among younger demographics. Management outlined a measured growth outlook for the rest of the year, citing consumer caution and macroeconomic uncertainty, while reaffirming its strategy of value, innovation, and operational discipline. Store expansion pace: The company aims to open 1,600 to 1,800 net new stores this year, focusing on smaller, more cost-effective formats, but expects a lower revenue contribution per store due to their size and ramp-up period. Menu and product innovation: Ongoing introduction of new menu items and product lines, including expanded beverage options and value meals, is expected to drive incremental traffic and appeal to price-sensitive customers. Margin management focus: Management anticipates modest improvement in cost of sales and intends to offset labor inflation with automation and operational simplification, but flagged potential headwinds from increased delivery mix and year-over-year comparisons in the second half of the year. Lillian Liu (Morgan Stanley): Asked about competitive pressures from delivery aggregators and consumer demand trends. Management replied that April trends were stable, with minimal impact from delivery competitors, and emphasized a watchful stance on market shifts. Michelle Cheng (Goldman Sachs): Inquired about Pizza Hut's same-store sales and margin trajectory. Management explained the positive effect of menu changes and noted that all-you-can-eat campaigns would impact quarterly margin phasing but reaffirmed the margin outlook. Brian Bittner (Oppenheimer & Co.): Sought insight into Chinese consumer sentiment and KFC's transaction growth versus the industry. CEO Joey Wat highlighted continued transaction gains and market share growth, especially in delivery. Chen Luo (Bank of America): Questioned the lower revenue contribution from new stores amid rapid expansion. CFO Adrian Ding clarified that smaller stores and timing of openings explain the trend, noting that revenue contribution should normalize over time. Christine Peng (UBS): Asked about KCOFFEE's expansion and store-level economics. CEO Joey Wat described strong growth potential, incremental sales benefits, and positive profit impact due to shared resources and equipment. Looking ahead, the StockStory team will focus on (1) the pace and profitability of store expansion, particularly in lower-tier cities and with new concepts like KCOFFEE Cafes, (2) the sustainability of same-store transaction growth and margin management amid evolving consumer trends, and (3) further evidence of automation and menu innovation translating to cost savings. We will also monitor competitive dynamics in delivery and digital channels as key factors for future performance. Yum China currently trades at a forward P/E ratio of 16.8×. Should you double down or take your chips? The answer lies in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
30-04-2025
- Business
- Associated Press
Yum China Reports First Quarter Results
Same-Store Sales Advanced to 100% of Prior-Year Levels for the First Time Since the First Quarter of 2024 9th Consecutive Quarter of Same-Store Transaction Growth OP Margin Increased 80 Basis Points to 13.4% and Restaurant Margin Expanded 100 Basis Points Operating Profit Up 7%; Diluted EPS Up 8%, or 12% Excluding F/X and Mark-to-market Impact SHANGHAI, April 30, 2025 /PRNewswire/ -- Yum China Holdings, Inc. (the 'Company' or 'Yum China') (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the first quarter ended March 31, 2025. First Quarter Highlights CEO Comments Joey Wat, CEO of Yum China, commented, 'We achieved a solid first-quarter performance amid an uncertain market environment. These results underscore the resilience of our business and the success of our dual-focus strategy, emphasizing innovation and operational efficiency. KFC continued to show resilience, delivering solid growth and profitability through both good times and bad. Pizza Hut continued its positive momentum after reaching what we believe was an inflection point. Our innovations touch every aspect of the business. KFC launched the spicy flavor of Original Recipe Chicken for the first time since we entered China in 1987. Pizza Hut added fresh twists to its classic Super Supreme flavor, offering it on burgers and pasta in addition to pizzas.' Wat continued, 'Our breakthrough model, KCOFFEE Cafe, reached the milestone of 1,000 locations. This business model leverages KFC's store space, resources and membership to attract additional traffic. For Pizza Hut, building on the success of WOW store conversions, we have opened brand new WOW stores in lower tier cities, where capex can be as low as half of a regular Pizza Hut store. Our teams are also continuously exploring ways to create more operational efficiency through innovative technologies, such as robotics and Generative AI. In the current evolving market environment, we remain steadfast in achieving our full year targets, including 1,600-1,800 net new stores, while creating sustainable, long-term value for our shareholders.' Capital Returns to Shareholders Outlook 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 a.m. U.S. Eastern Time on Wednesday, April 30, 2025 (7:00 p.m. Beijing/Hong Kong Time on Wednesday, April 30, 2025). A live webcast of the call may be accessed at 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 and a unique access PIN. Pre-registration Link: A replay of the webcast will be available two hours after the event and will remain accessible until April 29, 2026. Additionally, earnings release accompanying slides will be available at the Company's Investor Relations website 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 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 '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, franchise mix of net new stores, 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, our ability to control costs and expenses, including tax costs, changes in political, economic and regulatory conditions in China, as well as changes in political, business, economic and trade relations between the U.S. and 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. Our plan of capital returns to shareholders is based on current expectations, which may change based on market conditions, capital needs or otherwise. 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 operates over 16,000 restaurants under six brands across over 2,300 cities in China. KFC and Pizza Hut are the leading brands in the quick-service and casual dining restaurant spaces in China, respectively. In addition, Yum China has partnered with Lavazza to develop the Lavazza coffee concept in China. Little Sheep and Huang Ji Huang specialize in Chinese cuisine. Taco Bell offers innovative Mexican-inspired food. 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 Contacts In this press release: Reconciliation of Reported GAAP Results to Non-GAAP Measures (in millions, except per share data) (unaudited) In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ('GAAP') in this press release, the Company provides the following non-GAAP measures: These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of these non-GAAP measures provides additional information to investors to facilitate the comparison of past and present results, excluding those items that the Company does not believe are indicative of our core operations. With respect to non-GAAP measures adjusted for Special Items, the Company excludes impact from Special Items for the purpose of evaluating performance internally and uses them as factors in determining compensation for certain employees. Special Items are not included in any of our segment results. Adjusted EBITDA is defined as net income including noncontrolling interests adjusted for equity in net earnings (losses) from equity method investments, income tax, interest income, net, investment gain or loss, depreciation and amortization, store impairment charges, and Special Items. Store impairment charges included as an adjustment item in Adjusted EBITDA primarily resulted from our semi-annual impairment evaluation of long-lived assets of individual restaurants, and additional impairment evaluation whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If these restaurant-level assets were not impaired, depreciation of the assets would have been recorded and included in EBITDA. Therefore, store impairment charges were a non-cash item similar to depreciation and amortization of our long-lived assets of restaurants. The Company believes that investors and analysts may find it useful in measuring operating performance without regard to such non-cash items. Restaurant Profit is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales, including cost of food and paper, restaurant-level payroll and employee benefits, rent, depreciation and amortization of restaurant-level assets, advertising expenses, and other operating expenses. Company restaurant margin percentage is defined as Restaurant profit divided by Company sales. We also use Restaurant profit and Restaurant margin for the purposes of internally evaluating the performance of our Company-owned restaurants and we believe they provide useful information to investors as to the profitability of our Company-owned restaurants. Core Operating Profit is defined as Operating Profit adjusted for Special Items, and further excluding Items Affecting Comparability and the impact of F/X. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Items such as charges, gains and accounting changes which are viewed by management as significantly impacting the current period or the comparable period, due to changes in policy or other external factors, or non-cash items pertaining to underlying activities that are different from or unrelated to our core operations, are generally considered 'Items Affecting Comparability.' Examples of Items Affecting Comparability include, but are not limited to: temporary relief from landlords and government agencies; VAT deductions due to tax policy changes; and amortization of reacquired franchise rights recognized upon acquisitions. We believe presenting Core Operating Profit provides additional information to further enhance comparability of our operating results and we use this measure for purposes of evaluating the performance of our core operations. Core OP margin is defined as Core Operating Profit divided by Total revenues, excluding the impact of F/X. The following tables set forth the reconciliation of the most directly comparable GAAP financial measures to the non-GAAP financial measures. The reconciliation of GAAP Operating Profit to Restaurant Profit and Core Operating Profit by segment is presented in Segment Results within this release. View original content: SOURCE Yum China Holdings, Inc.
South China Morning Post
07-02-2025
- Business
- South China Morning Post
KFC China operator Yum to continue opening spree, value-menu push
Published: 3:30pm, 7 Feb 2025 Yum China Holdings , the operator of KFC and Pizza Hut in mainland China, plans to open as many as 1,800 new stores in 2025, maintaining an expansion pace set last year to tap lower-tier cities for growth amid a slow economy. The fast-food company revealed its plans while reporting that 2024 sales increased 5 per cent from a year earlier to US$11.3 billion, which was in line with market expectations. 'There are still a lot of opportunities for us to open stores both in top-tier and lower-tier cities,' CEO Joey Wat said during a briefing on Thursday. Yum China would focus on smaller Chinese cities with 'lower investment, smaller menus and a simpler operating model', she added. The strategy comes as mainland consumers , spooked by China's lingering deflation , have been tightening their purse strings over the past two years and are expecting darker days ahead amid the prospect of a trade war with the US following the return of President Donald Trump to the White House. About half of Yum's budgeted capital expenditure of US$700 million to US$800 million for this year would be used for new store openings, it said. 'The company's focus on value for money is unchanged, supported by various promotions,' Deutsche Bank analyst Han Zhang said in a research note. Yum was reluctant to provide guidance for same-store sales growth in 2025 given that consumer spending might turn cautious amid 'macroeconomic uncertainties', he added. In its guidance for net new store openings, Yum said a total 1,600 to 1,800 outlets would be added in 2025, compared with 1,751 last year. In the fourth quarter of 2024, it opened 534 new stores.
