Yum China Misses Q1 Earnings Mark, But Digital Sales Keep Cooking - Yum China Holdings (NYSE:YUMC)

Yum China Holdings, Inc (NYSE:YUMC) shares are trading lower Wednesday after the first-quarter 2025 earnings.

The company reported first-quarter revenue growth of 1% year-on-year to $2.98 billion, missing the analyst consensus estimate of $3.09 billion. In addition:

Total system sales rose 2% year-over-year, excluding currency effects, due to 4% of net new unit contribution.
Same-store sales advanced to 100% of last year's level for the first time since the first quarter of 2024.
KFC's system sales grew 3%, delivery sales grew 13%, contributing approximately 43% of KFC's company sales.
Pizza Hut's system sales rose 2%, and delivery sales grew 13%, contributing 42% of the company's sales.
Digital sales reached $2.6 billion, with digital ordering accounting for approximately 93% of total company sales.
Core operating profit grew 8% and the margin expanded 80 basis points to 13.4. Adjusted EPS of 77 cents missed the consensus estimate of 78 cents.
The company held $825 million in cash and equivalents as of March end. Operating cash flow was $452 million for the quarter.
247 new stores opened for a total of 16,642 stores as of March 31.
$262 million in capital returned to shareholders through $172 million in share repurchases and $90 million in cash dividends in the quarter.
As of March 31, approximately $1.1 billion remained available for future share repurchases under the current authorization program.

Also Read: Domino’s Pizza Will Grow With Stuffed Crust & DoorDash Partnership, Say Analysts

Dividend: The board declared a cash dividend of 24 cents per share on Yum China’s common stock, payable on June 18, 2025 to shareholders of record as of the close of business on May 28.

Outlook: For 2025, Yum China targets approximately 1,600 to 1,800 net new stores and capital expenditures of $700 million to $800 million.

The company plans to return $3 billion to shareholders from the beginning of 2025 through 2026.

Yum China sees the franchise mix of net new stores to gradually increase to 40-50% for KFC and 20-30% for Pizza Hut over the next few years.

Price Action: YUMC shares traded lower by 1.39% at $46.03 in premarket at last check Wednesday.

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