Loomis Sayles, an investment management company, released its “Global Growth Fund” investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. In the second quarter, the fund returned 16.61% compared to 11.53% for the MSCI ACWI Index Net. The firm seeks to invest in high-quality businesses that possess sustainable competitive advantages and experience profitable growth, especially when these companies are trading at a substantial discount to their intrinsic value. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its second-quarter 2025 investor letter, Loomis Sayles Global Growth Fund highlighted stocks such as Yum China Holdings, Inc. (NYSE:YUMC). Yum China Holdings, Inc. (NYSE:YUMC) is a restaurant company in the People’s Republic of China that operates through KFC and Pizza Hut segments. The one-month return of Yum China Holdings, Inc. (NYSE:YUMC) was -0.09%, and its shares lost 7.90% of their value over the last 52 weeks. On September 29, 2025, Yum China Holdings, Inc. (NYSE:YUMC) stock closed at $43.61 per share, with a market capitalization of $15.866 billion.
Loomis Sayles Global Growth Fund stated the following regarding Yum China Holdings, Inc. (NYSE:YUMC) in its second quarter 2025 investor letter:
“Yum China Holdings, Inc. (NYSE:YUMC) is the largest restaurant company in China, operating over 16,000 restaurants primarily under the KFC and Pizza Hut brands. A fund holding since the fourth quarter of 2016 when it was spun off from existing portfolio holding Yum! Brands, Yum China reported solid quarterly financial results that were better than expected for same-store-sales growth and restaurant margins and again reflected record net new store openings. However, unit growth was nonetheless slower than expected and revenues and profitability were below expectations. We believe the financial and operating results reflect the company’s continued success in navigating a challenging consumer spending environment. Yum China continues to expand into lower-tier cities while consistently innovating to sustain consumer purchases – especially among its over 540 million loyalty members. We also believe the company has the products and scale to offer increasingly value-conscious consumers attractive food options at all price points, while still serving customers looking for greater premiumization. With its iconic brands, large and complex supply-chain infrastructure, and real estate procurement expertise, we believe Yum China remains well positioned to benefit from the secular growth of consumer spending on restaurants in China.
Total sales of $3 billion reflected system sales that rose 2% year over year. At the company’s larger, more-profitable KFC segment, reported system sales rose 3%. KFC same-store sales were flat year over year, as 4% growth in transactions was offset by a 4% decline in ticket prices as consumers remained value-conscious given a challenging spending environment. T he company also continued to open new units, with 295 net new KFC units in the quarter, while maintaining attractive cash payback periods of approximately two years. As of March 31, 2025, KFC operated in approximately 2,300 cities out of more than 3,000 suitable cities and continues to have a long runway for continued expansion. Across both its KFC and Pizza Hut franchises, the company has accelerated the pace of its store openings while sustaining attractive payback periods. While it took the company twenty-five years to open its first five thousand stores and eight years to open the next five thousand, the last five thousand took only four years and the company anticipates exceeding 20,000 units by 2026…” (Click here to read the full text)
Yum China Holdings, Inc. (NYSE:YUMC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 30 hedge fund portfolios held Yum China Holdings, Inc. (NYSE:YUMC) at the end of the second quarter, down from 31 in the previous quarter. While we acknowledge the risk and potential of Yum China Holdings, Inc. (NYSE:YUMC) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Yum China Holdings, Inc. (NYSE:YUMC) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Yum China Holdings, Inc. (NYSE:YUMC) and shared a list of best low-risk stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
