Why Are Yum China Shares On The Rise Today?

Yum China Holdings Inc YUMC shares are trading higher after it launched the company's refreshed RGM 2.0 strategy and highlighted strategic initiatives to accelerate network expansion, drive sales growth and boost profits. 

Yum China is anticipating to reach 20,000 stores by 2026.

It aims to achieve a high-single-to-double-digit CAGR for system sales and operating profit as well as double-digit EPS CAGR from 2024 to 2026, compared to the base year 2023 and in constant currency. 

The company is targeted to return approximately $3 billion to shareholders through quarterly dividends and share repurchases over the same three-year period.

“Going forward, we are transitioning our RGM strategy to place greater emphasis on growth. By leveraging flexible store formats and strategically partnering with franchisees, we are expanding into more locations,” said CEO Joey Wat.

Yum China also planned to broaden its use of AI technologies to further improve customer experience, store operations and people management.

The company earmarked a total capital expenditure of $3.5 billion to $5 billion over the next three years. 

It increased its net new stores target for 2023 to 1,400-1,600, compared with its previous target of 1,100-1,300.

YUMC Price Action: Yum China Holdings shares are trading higher by 6.22% at $56.49 on the last check Thursday.

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