Yum China Holdings, Inc. (YUMC) shares soared 7.64% in pre-market trading on Thursday, following the company's better-than-expected fourth quarter earnings and announcements to boost shareholder returns.
The Chinese fast-food operator reported adjusted earnings per share of $0.30 for Q4 2024, beating Wall Street estimates of $0.29. While revenue of $2.6 billion slightly missed forecasts of $2.62 billion, the company posted strong comparable sales growth with transactions up 4% year-over-year.
Investors cheered Yum China's plans to boost shareholder returns. The company announced a 50% increase in its quarterly cash dividend to $0.24 per share. It also unveiled plans to return $3 billion to shareholders through buybacks and dividends over 2025 and 2026, building on the $1.5 billion returned in 2024.
Yum China provided an upbeat outlook, targeting 1,600 to 1,800 net new store openings in fiscal 2025 and capital expenditures of $700 million to $800 million to support growth initiatives. The expansion plans and shareholder-friendly actions were welcomed by investors, driving the stock's surge in early trading.