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Yum China's (YUMC) KFC Expands Presence With its 10,000th Store
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Yum China Holdings, Inc. (YUMC - Free Report) achieved a significant milestone in KFC China's 36-year growth journey with the opening of its 10,000th store. Nestled in Hangzhou, the new store is situated along the Beijing-Hangzhou Grand Canal, a historically significant link connecting northern and southern China.
Since the establishment of its first store in Beijing in 1987, KFC has become the largest QSR brand in China by system sales. The upside is supported by a world class in-house supply chain management system crafted over three decades.
The company is strategically positioned for sustained growth, leveraging its expansive store network and economies of scale. KFC China aims to cover more than half of China's population by 2026. With a solid foundation and untapped potential, YUMC is optimistic about KFC China's continued leadership in the Chinese restaurant market.
To achieve its ambitious growth objectives, YUMC aims to position KFC China as the preferred daily choice for an increasingly diverse customer base. Pioneering new formats and concepts, KFC China is driving store expansion into untapped cities, staying ahead of evolving consumer preferences and emerging consumption trends. Moving forward, the company ensures a variety of innovative meal choices at different price ranges, making KFC accessible anytime and anywhere.
Strategic Expansion to Boost Brand Presence
In a strategic move to enhance its reach, YUMC is actively expanding KFC China's footprint. Despite a presence in over 1,900 cities at the end of third-quarter 2023, the brand is targeting to enter 1,100 untapped cities. In the past five years, KFC China experienced impressive growth, with an average annual increase in net new stores exceeding 22%. This expansion strategy includes accelerating store openings in lower-tier cities and increasing store density in higher-tier cities.
Focus on Innovation to Cater New Demand
YUMC's KFC China is actively expanding its consumer base and meeting changing Chinese preferences through the introduction of innovative products. Successful additions like the Juicy Whole Chicken and Beef Burgers have surpassed $100 million in annual sales. To cater to diverse consumers better, KFC China is diversifying its menu with more affordable options. Additionally, the company aims to open over 300 standalone KCOFFEE stores by the end of 2024, advancing its in-house coffee brand expansion.
Transforming Delivery Dynamics
In response to an expanded store presence in diverse regions, KFC China is enhancing the accessibility and convenience of its delivery services. This aligns with an increase in double-digit orders under 40 RMB, particularly in the small-ticket delivery segment, presenting a strategic opportunity for YUMC in the competitive fast-food landscape.
Emphasizing a steadfast dedication, YUMC prioritizes robust margins through effective procurement, ongoing product innovation and maximizing chicken utilization. The company integrates cutting-edge technologies like in-store Internet of Things (IoT), automation and artificial intelligence (AI) to optimize operational efficiency.
Price Performance
The stock has fallen 28.3% in the past year against the industry’s 6.7% rise. The company is likely to benefit from its digital initiatives, menu innovation efforts and unit expansion.
Image Source: Zacks Investment Research
Looking ahead, YUMC aims to ramp up its annual net new store openings, surpassing 1,200 within the next three years. In this plan, 15% to 20% are expected to be franchise stores, aligning with Yum China's broader objective of reaching 20,000 stores by 2026. KFC China's future strategy involves diverse store models, including standard, future concept, mini and strategically located stores in lower-tier cities. This strategic approach highlights KFC China's commitment to growth through innovation and adaptability in the dynamic Chinese market.
Zacks Rank & Key Picks
Yum China currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the Zacks Retail-Wholesale sector are:
Brinker International, Inc. (EAT - Free Report) currently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 223.6%, on average. The stock has gained 23.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for EAT’s 2024 sales and earnings per share (EPS) suggests a rise of 5.1% and 26.2%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) flaunts a Zacks Rank #1 at present. It has a trailing four-quarter earnings surprise of 713%, on average. Shares of ANF have surged 287.7% in the past year.
The Zacks Consensus Estimate for ANF’s 2024 sales and EPS suggests increases of 13.3% and 2,196%, respectively, from the year-ago period’s levels.
Beacon Roofing Supply, Inc. (BECN - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 11.1%, on average. Shares of BECN have risen 50.4% in the past year.
The Zacks Consensus Estimate for BECN’s 2023 sales and EPS indicates 7.2% and 9% growth, respectively, from the year-ago period’s levels.
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Yum China's (YUMC) KFC Expands Presence With its 10,000th Store
Yum China Holdings, Inc. (YUMC - Free Report) achieved a significant milestone in KFC China's 36-year growth journey with the opening of its 10,000th store. Nestled in Hangzhou, the new store is situated along the Beijing-Hangzhou Grand Canal, a historically significant link connecting northern and southern China.
Since the establishment of its first store in Beijing in 1987, KFC has become the largest QSR brand in China by system sales. The upside is supported by a world class in-house supply chain management system crafted over three decades.
The company is strategically positioned for sustained growth, leveraging its expansive store network and economies of scale. KFC China aims to cover more than half of China's population by 2026. With a solid foundation and untapped potential, YUMC is optimistic about KFC China's continued leadership in the Chinese restaurant market.
To achieve its ambitious growth objectives, YUMC aims to position KFC China as the preferred daily choice for an increasingly diverse customer base. Pioneering new formats and concepts, KFC China is driving store expansion into untapped cities, staying ahead of evolving consumer preferences and emerging consumption trends. Moving forward, the company ensures a variety of innovative meal choices at different price ranges, making KFC accessible anytime and anywhere.
Strategic Expansion to Boost Brand Presence
In a strategic move to enhance its reach, YUMC is actively expanding KFC China's footprint. Despite a presence in over 1,900 cities at the end of third-quarter 2023, the brand is targeting to enter 1,100 untapped cities. In the past five years, KFC China experienced impressive growth, with an average annual increase in net new stores exceeding 22%. This expansion strategy includes accelerating store openings in lower-tier cities and increasing store density in higher-tier cities.
Focus on Innovation to Cater New Demand
YUMC's KFC China is actively expanding its consumer base and meeting changing Chinese preferences through the introduction of innovative products. Successful additions like the Juicy Whole Chicken and Beef Burgers have surpassed $100 million in annual sales. To cater to diverse consumers better, KFC China is diversifying its menu with more affordable options. Additionally, the company aims to open over 300 standalone KCOFFEE stores by the end of 2024, advancing its in-house coffee brand expansion.
Transforming Delivery Dynamics
In response to an expanded store presence in diverse regions, KFC China is enhancing the accessibility and convenience of its delivery services. This aligns with an increase in double-digit orders under 40 RMB, particularly in the small-ticket delivery segment, presenting a strategic opportunity for YUMC in the competitive fast-food landscape.
Emphasizing a steadfast dedication, YUMC prioritizes robust margins through effective procurement, ongoing product innovation and maximizing chicken utilization. The company integrates cutting-edge technologies like in-store Internet of Things (IoT), automation and artificial intelligence (AI) to optimize operational efficiency.
Price Performance
The stock has fallen 28.3% in the past year against the industry’s 6.7% rise. The company is likely to benefit from its digital initiatives, menu innovation efforts and unit expansion.
Image Source: Zacks Investment Research
Looking ahead, YUMC aims to ramp up its annual net new store openings, surpassing 1,200 within the next three years. In this plan, 15% to 20% are expected to be franchise stores, aligning with Yum China's broader objective of reaching 20,000 stores by 2026. KFC China's future strategy involves diverse store models, including standard, future concept, mini and strategically located stores in lower-tier cities. This strategic approach highlights KFC China's commitment to growth through innovation and adaptability in the dynamic Chinese market.
Zacks Rank & Key Picks
Yum China currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the Zacks Retail-Wholesale sector are:
Brinker International, Inc. (EAT - Free Report) currently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 223.6%, on average. The stock has gained 23.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for EAT’s 2024 sales and earnings per share (EPS) suggests a rise of 5.1% and 26.2%, respectively, from the year-ago period’s levels.
Abercrombie & Fitch Co. (ANF - Free Report) flaunts a Zacks Rank #1 at present. It has a trailing four-quarter earnings surprise of 713%, on average. Shares of ANF have surged 287.7% in the past year.
The Zacks Consensus Estimate for ANF’s 2024 sales and EPS suggests increases of 13.3% and 2,196%, respectively, from the year-ago period’s levels.
Beacon Roofing Supply, Inc. (BECN - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 11.1%, on average. Shares of BECN have risen 50.4% in the past year.
The Zacks Consensus Estimate for BECN’s 2023 sales and EPS indicates 7.2% and 9% growth, respectively, from the year-ago period’s levels.