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<Research> CLSA Cuts Yum China Holdings, Inc. (YUMC.US) TP to USD56, Expects KFC Margin to Stay Largely Flat Over Next Three Years
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CLSA issued a research report stating that YUM CHINA (09987.HK)'s results for 1Q26 met expectations. Due to a later-than-usual Lunar New Year, dining gatherings decreased, resulting in flat same-store sales growth during the period. However, the company expanded its product categories and offered competitive pricing to encourage consumers to try more items. It expects same-store sales to return to positive growth after the first quarter. The broker noted that KFC's restaurant margin declined by 66 bps YoY, mainly due to rising labor costs, which warrants attention. Although labor cost pressure may ease in 2H26 as delivery subsidies are reduced, this also reflects that the delivery business is constraining KFC's margin this year. Given that its margin forecasts for KFC over the next three years remain largely flat, CLSA lowered its US share TP for Yum China Holdings, Inc. (YUMC.US) from USD57 to USD56 and maintained an Outperform rating. It expects to cut its adjusted EBITDA forecasts by 1% to 3%. (hc/j) This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. Auto-translated by AI AASTOCKS Financial News |
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