Yum China Reports First Quarter 2023 Results.

SHANGHAI: Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the first quarter ended March 31, 2023.

First Quarter Highlights

Total revenues increased 9% year over year to $2.92 billion from $2.67 billion (an 18% increase excluding foreign currency translation ("F/X")).

Total system sales increased 17% year over year, with increases of 17% at both KFC and Pizza Hut, excluding F/X. Growth was mainly attributable to same-store sales growth, new unit contribution and lapping of temporary store closures in the prior year.

Same-store sales increased 8% year over year, with increases of 8% at KFC and 7% at Pizza Hut, excluding F/X.

Opened 233 net new stores during the quarter; total store count reached 13,180 as of March 31, 2023.

Operating Profit increased 118% year over year to $416 million from $191 million (a 134% increase excluding F/X), primarily driven by sales leveraging and margin expansion.

Adjusted Operating Profit increased 117% year over year to $419 million from $193 million (a 133% increase excluding F/X).

Restaurant margin was 20.3%, compared with 13.8% in the prior year period.

Effective tax rate was 28.5%.

Net Income increased 189% to $289 million from $100 million in the prior year period, primarily due to the increase in Operating Profit.

Adjusted Net Income increased 186% to $292 million from $102 million in the prior year period (a 131% increase excluding the net losses of $14 million and $30 million in the first quarter of 2023 and 2022, respectively, from our mark-to-market equity investments; a 148% increase if further excluding F/X).

Diluted EPS increased 196% to $0.68 from $0.23 in the prior year period.

Adjusted Diluted EPS increased 188% to $0.69 from $0.24 in the prior year period (a 132% increase excluding the net losses from our mark-to-market equity investments in the first quarter of 2023 and 2022; a 148% increase if further excluding F/X).

Key Financial Results

First Quarter 2023

% Change

System Sales

Same-Store Sales

Net New Units

Operating Profit

Yum China

+17

+8

+9

+118

KFC

+17

+8

+9

+91

Pizza Hut

+17

+7

+11

+85

First Quarter

(in US$ million, except

% Change

per share data and percentages)

2023

2022

Reported

Ex F/X

Operating Profit

$

416

$

191

+118

+134

Adjusted Operating Profit(1)

$

419

$

193

+117

+133

Net Income

$

289

$

100

+189

+212

Adjusted Net Income(1)

$

292

$

102

+186

+207

Basic Earnings Per Common Share

$

0.69

$

0.23

+200

+222

Adjusted Basic Earnings Per Common Share(1)

$

0.70

$

0.24

+192

+213

Diluted Earnings Per...