(Yicai) April 30 -- Yum China Holdings, which runs the KFC and Pizza Hut fast-food chains in the country, reported record operating profit of USD447 million for the first quarter amid plans to expand its store count by about a 10th this year.

Operating profit jumped 12 percent in the three months ended March 31, the Shanghai-based firm’s latest earnings report showed yesterday. Net profit rose 6 percent to USD309 million, while operating revenue climbed 10 percent to USD3.27 billion.

Yum China said it had benefited from a positive foreign exchange impact, adding that its operating profit margin was 13.7 percent, up 0.3 percentage point and higher for the eighth consecutive quarter.

The company has the exclusive operating and franchise rights in the Chinese mainland for KFC, Pizza Hut, and Taco Bell. It also wholly owns the Little Sheep and Huang Jihuang restaurant brands, and it works with Lavazza to develop and expand Lavazza coffee shops in China.

Yum China revealed that it plans to have over 20,000 stores in total this year, which means opening more than 1,900 new outlets. The firm will also raise the proportion of franchise stores in the new KFC and Pizza Hut branches to between 40 percent and 50 percent, with planned capital expenditure of USD600 million to USD700 million.

The company opened 636 stores in the first quarter, a new quarterly high and more than double that of the same period last year. As of March 31, the total number of stores was 18,737, and the share of net new franchise stores was 39 percent.

Yum China said its investment in Chinese on-demand services giant Meituan had a negative impact of USD9 million, compared with a positive impact of USD2 million in the first quarter of last year.

Chief Executive Joey Wat said she remains optimistic following better consumer sentiment. The later timing of the Lunar New Year holiday this year and the additional spring holiday in April affected dining patterns around gatherings and same-store sales growth in the quarter, she said, adding that combined the March and April performances are in line with expectations.

Yum China [HKG: 9987] closed up 0.5 percent at HKD381 (USDXX) apiece in Hong Kong today, after its New York-listed stock [NYSE: YUMC] gained 2.9 percent to USD48.70 yesterday.

Takeout sales rose 31 percent in the first quarter, accounting for 54 percent of Yum China’s restaurant income, up from 42 percent in the same period of last year.

Wat said Yum China is confident it can meet its full-year earnings targets as the broader environment for competition among delivery platforms is becoming more rational.

Yum China has exclusive operation and licensing rights for KFC, Pizza Hut and Taco Bell, and completely owns the Little Sheep and Huang Ji Huang restaurant brands. Additionally, it collaborates with Lavazza to explore and develop Lavazza coffee shops in the country.

Editor: Tom Litting