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Quarterly Report: Yum China Holdings

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US
Mon, 10/07/2017 - 16:09
Yum China

Over the reporting period, Yum China Holdings’ share price experienced dramatic growth, rising over 40%. Looking at our BrandIndex data, which measures consumer opinion of thousands of brands around the world, we can see that the public's combined perception of Yum China's three biggest brands — KFC, Little Sheep, and Pizza Hut — has also improved over the same period.

Yum China’s Q2 results showed an impressive increase in operating profit of 64%, which was underlined by a 3% spike in same-store sales. KFC, the largest Western food chain operating in China, led the way with a 4% increase in sales, while Pizza Hut remained flat.

If we break Yum China into its three separate brands, BrandIndex data reflects this trend with a five-point increase in Chinese consumer purchase intent toward KFC, while Pizza Hut once again held stable.

Although Pizza Hut's sales have remained flat, a look at Yum China’s rivals over the past two years reveals that, in the eyes of Chinese consumers, the brand has a clear dominance over Domino’s Pizza. In the battle between KFC and McDonald's, which is the second largest Western fast food chain in China, the race is much tighter. As viewed by Chinese consumers, the two brands are neck and neck.

Finally, with Yum! Brands reporting its quarterly earnings at the beginning of next month, we’ve also taken a look at its data. Again, the stock has enjoyed significant growth between the beginning of April and end of June. Consumer opinion of its three brands — KFC, Pizza Hut, and Taco Bell — has seen a slight improvement. Current customers of Yum! Brands fell then rose throughout the past three months until a dip in the final week brought the total back to where it started at the beginning of the quarter.

Disclaimer: YouGov for Traders and the data contained within this article do not constitute investment advice.

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