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SHANGHAI - Yum China Holdings, Inc. (NYSE:YUMC) reported first quarter earnings that fell short of analyst expectations on Wednesday.
The company’s shares were down -1.56% in premarket trading following the release.
The fast food restaurant operator posted adjusted earnings per share of $0.77, missing the consensus estimate of $0.80. Revenue came in at $2.98 billion, below analysts’ projections of $3.17 billion.
Despite the miss, Yum China saw same-store sales reach 100% of prior year levels for the first time since Q1 2024. The company also reported its ninth consecutive quarter of same-store transaction growth, with transactions up 6% YoY.
"We achieved a solid first-quarter performance amid an uncertain market environment," said Joey Wat, CEO of Yum China. "These results underscore the resilience of our business and the success of our dual-focus strategy, emphasizing innovation and operational efficiency."
Total (EPA:TTEF) system sales grew 2% YoY excluding foreign currency translation, driven by 4% net new unit growth. The company opened 247 net new stores in the quarter, bringing its total store count to 16,642.
Operating profit increased 7% YoY to $399 million, while restaurant margin expanded 100 basis points to 18.6%. Yum China attributed the margin improvement to savings in food and paper costs as well as occupancy and other operating expenses.
Looking ahead, the company maintained its target of opening 1,600 to 1,800 net new stores in fiscal 2025. It also plans to return $3 billion to shareholders through 2026, on top of $1.5 billion delivered in 2024.
While the results missed expectations, Yum China emphasized its continued expansion and profitability gains as it navigates an evolving market environment in China.
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