On April 30th, Hong Kong listed company Yum! Brands China disclosed its performance for the first quarter of 2024. During the reporting period, the company's total revenue reached a historic high of 2.96 billion US dollars; The core operating profit continued to grow despite last year's high base, reaching 396 million US dollars.
In the first quarter, Yum! Brands China accelerated its expansion of stores, adding a net of 378 new stores, bringing the total number of stores to 15022. It is reported that two-thirds of the company's new stores during the period will adopt a smaller store model. For example, KFC has developed a small town mini store model specifically for lower tier cities, reducing the capital expenditure of each store to below 500000 yuan through simplified menus and optimized equipment.
Pizzahut has developed a "boutique" store model that pays more attention to the catering business, providing more menu choices, and complementing Pizzahut's "satellite store". Yum! Brands China reported that "Jingchuang Store" has performed well, allowing the company to more flexibly enter smaller cities to expand its business.
Yum! Brands China stated that while accelerating store opening, the company's new store investment returns are good. KFC's return on investment cycle is kept at 2 years, and Pizzahut's return on investment cycle is 2-3 years.
Over the past decade, Yum! Brands China's takeout sales have achieved double-digit growth every year. Thanks to the reduction of delivery fees, Yum! China's delivery business sales increased by 12% in the first quarter, accounting for 38% of KFC's and Pizzahut's sales.
Looking ahead to 2024, Yum! Brands China is expected to add a net of 1500 to 1700 new stores, with a strong growth momentum in the number of stores. The company is confident in achieving its target of 20000 stores by 2026. At the same time, the company will increase shareholder returns by providing at least $1.5 billion in quarterly cash dividends and stock buybacks to shareholders.
Qu Cuirong, CEO of Yum! Brands China, said that the company is very confident in seizing the huge opportunities in the Chinese market. Through flexible store formats, strategic franchises, and excellent products at different prices, the company will continue to expand its potential market.