On the morning of February 7th, Hong Kong listed company Yum! Brands China disclosed its financial performance announcements for the fourth quarter and full year of 2023. In the fourth quarter of 2023, Yum! China achieved a total revenue of 2.49 billion US dollars, an increase of 21% at a fixed exchange rate; Operating profit increased by 170% year-on-year to $110 million.
In 2023, Yum! China achieved a total revenue of 11 billion US dollars, an increase of 21% at a fixed exchange rate; The operating profit was 1.1 billion US dollars, an increase of 86% at a fixed exchange rate and a historic high on a comparable basis.
"We achieved excellent performance in 2023, with both revenue and profit reaching new highs," said Qu Cuirong, CEO of Yum! Brands China. In 2023, Yum! Brands China responded flexibly and seized the opportunities brought by market changes. The company's annual system sales increased by 21%, core operating profit increased by 79%, and the restaurant profit margin still achieved growth. At the same time, thanks to the flexible store model, the reduction of single store investment and the optimization of single store profitability, Yum! China's new store payback period remains at a healthy level, with KFC two years and Pizzahut three years.
In 2023, Yum! China added a net of 1697 new stores, setting a record for net new stores. By the end of 2023, Yum! Brands China has 14644 stores, KFC 10296 stores and Pizzahut 3312 stores.
Looking ahead to 2024, Yum! Brands China stated that the company is optimistic about the huge growth opportunities in China and expects to add a net of 1500 to 1700 new stores this year. The healthy new store return period gives the company confidence to continue expanding its business and achieve the goal of 20000 branches by 2026.
It is reported that from 2024 to 2026, Yum! China's goal is to achieve a compound annual growth rate of high unit to double-digit system sales and operating profit, and a compound annual growth rate of double-digit earnings per share. The company will continue to seek new opportunities through product innovation, launching attractive activities, and expanding product price ranges.
In terms of shareholder returns, Yum! China stated that in 2024, the company plans to increase shareholder returns to approximately $1.5 billion. Specifically, Yum! Brands China will increase its cash dividend per share by 23% to $0.16, which is approximately $250 million for the entire year. In addition, Yum! Brands China has developed a $750 million share buyback plan and may further increase the buyback by approximately $500 million in the first quarter of 2024, bringing the total amount to $1.25 billion in 2024, equivalent to approximately 9% of the current stock market value.
On the morning of February 7th, Yum! Brands China's stock price rose by 28% at one point.