Yum China Stock Price, News & Analysis

Yum China Holdings announced enhanced medical insurance coverage for its approximately 10,000 Restaurant General Managers (RGMs), with up to RMB 1 million coverage effective January 2022. Additionally, the critical illness insurance for their family members will be increased to RMB 200,000. The company is also upgrading its Family Care Fund, increasing coverage to RMB 150,000 for restaurant management team members. These improvements aim to support over 60,000 employees and their families, reflecting Yum China's commitment to employee welfare amidst ongoing challenges.

Yum China Holdings reported a 9% increase in total revenues for Q3 2021, reaching $2.55 billion, despite challenges from the Delta variant. Operating profit fell 68% to $178 million, primarily due to sales deleveraging. The company opened a record 524 new stores, increasing total store count to 11,415. However, same-store sales decreased by 7%, with KFC and Pizza Hut down 8% and 5%, respectively. The restaurant margin also dropped to 12.2% from 18.6% the prior year. Looking ahead, challenges related to COVID-19 and rising costs are expected to impact recovery.

Yum China, on October 20, 2021, unveiled its Digital R&D Center across Shanghai, Nanjing, and Xi'an, marking a strategic move to enhance its digital ecosystem. The center will focus on utilizing big data, AI, and digital tools to improve customer service, store operations, smart delivery, and supply chain management. With an investment of $1-1.5 billion over five years, $100-200 million will be allocated to the center, aiming to boost in-house digital capabilities and support expansion towards 20,000 stores.

Yum China Holdings, Inc. (YUMC) announced that its board will discuss a potential quarterly dividend on or around October 28, 2021. This decision follows the compliance with HKEX regulations, which require notice before dividend declarations. No assurance is given that the dividend will be declared as no resolution has been adopted yet. Yum China operates numerous restaurant brands, including KFC and Pizza Hut, and maintains over 11,000 outlets across China. For further updates, investors can refer to the company's Investor Relations page.

Yum China and Lavazza announced an expansion plan to rapidly increase Lavazza cafés in China, targeting 1,000 new stores by 2025. The companies will inject $200 million into their joint venture, which was formed in early 2020 and currently has over 20 stores. The partnership aims to leverage Yum China's supply chain and digital capabilities to enhance Lavazza's presence and product distribution in the Chinese market. As of August 31, 2021, Lavazza has 22 stores, with plans to double this by year-end.

Yum China Holdings aims to accelerate growth by expanding its store network to 20,000 locations, focusing on digital and supply chain enhancements. The company reported resilience during the pandemic, with KFC and Pizza Hut adapting successfully. Yum China plans to invest $1 billion in supply chain improvements and capitalize on the growing coffee market through Lavazza. A long-term outlook suggests potential for high single to double-digit growth in system sales and earnings per share, underlining a robust strategy for sustainable growth.