Yum China Reports Fourth Quarter 2025 Results

Fourth Quarter Same-Store Sales Increased 3%, System Sales Grew 7% and Operating Profit Up 25%

Full Year Operating Profit Rose 11%; Diluted EPS Up 8%, or 14% Excluding Mark-to-Market and F/X Impact

Increase Dividend by 21% and On Track to Return $1.5 billion to Shareholders in 2026

SHANGHAI, Feb. 4, 2026 /PRNewswire/ -- Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the fourth quarter and year ended December 31, 2025.

Fourth Quarter Highlights

• Total system sales grew 7% year over year ("YoY"), excluding foreign currency translation ("F/X").
• Same-store sales grew 3% YoY, the third consecutive quarter of growth. Same-store transactions grew 4% YoY, the 12th consecutive quarter of growth.
• Total revenues increased 9% YoY to $2.8 billion, or a 7% increase excluding F/X.
• Opened a fourth-quarter record of 587 net new stores, of which 36% were opened by franchisees.
• Operating profit grew 25% YoY to $187 million. Core operating profit grew 23% YoY.
• OP margin was 6.6%, an increase of 80 basis points YoY.
• Restaurant margin was 13.0%, an increase of 70 basis points YoY, driven primarily by improvements in Food and Paper and Occupancy and Other Operating expenses ratios.
• Diluted EPS increased 33% YoY to $0.40, or up 29% excluding F/X, and up 21% further excluding the impact⁽¹⁾ of the mark-to-market equity investments.
• Delivery sales grew 34% YoY. Delivery contributed approximately 53% of total Company sales, up from 42% in the same quarter last year.

Full Year Highlights

• Total system sales grew 4% YoY, excluding F/X.
• Same-store sales grew 1% YoY.
• Total revenues increased 4% YoY to $11.8 billion, also a 4% increase excluding F/X.
• Opened 1,706 net new stores, of which 31% were opened by franchisees. Total store count reached 18,101 as of December 31, 2025.
• Operating profit grew 11% YoY to $1.3 billion. Core operating profit also grew 11% YoY.
• OP margin was 10.9%, up 60 basis points YoY.
• Restaurant margin was 16.3%, an increase of 60 basis points YoY, driven primarily by improvements in Food and Paper and Occupancy and Other Operating expenses ratios.
• Diluted EPS increased 8% YoY to $2.51, also up 8% excluding F/X, and up 14% further excluding the impact⁽²⁾ of the mark-to-market equity investments.
• Returned $1.5 billion to shareholders in 2025 through $353 million in cash dividends and $1.14 billion in share repurchases.
• Delivery sales grew 25% YoY. Delivery contributed approximately 48% of total Company sales, up from 39% last year.
• Total membership of KFC and Pizza Hut exceeded 590 million, up 13% YoY. Active Members, defined as those who transacted in the past 12 months, of KFC or Pizza Hut, exceeded 265 million, representing a 13% YoY increase.

CEO Comments

Joey Wat, CEO of Yum China, commented, "Our fourth quarter performance capped off 2025 on a high note. Thanks to our team's hard work, we delivered same-store sales growth for three consecutive quarters and same-store transactions growth for twelve consecutive quarters. System sales growth sequentially improved to 7%, and operating profit increased 25% year-over-year in the fourth quarter. KFC has unlocked new consumption occasions through its KCOFFEE cafe and KPRO side-by-side modules. Pizza Hut has enhanced its value-for-money proposition and developed the WOW model to expand into previously untapped locations, especially in lower-tier cities."

Wat concluded, "Looking ahead, we are on track to reach over 20,000 stores in 2026 and are targeting more than 30,000 stores by 2030 with an equity-and-franchise hybrid model. We are also broadening our addressable market through front-end segmentation and back-end consolidation. As discussed at our Investor Day, we remain committed to executing our RGM 3.0 strategy, with a dual focus on innovation and operational efficiency."

Key Financial Results

Capital Returns to Shareholders

• The Company is on track to return $1.5 billion each year from 2024 to 2026, which is annually around 8% of our market capitalization as of February 3, 2026.
• In 2025, the Company returned $1.5 billion for the full year and $539 million in the fourth quarter. For the full year, Yum China repurchased 24.7 million shares of common stock, which is equivalent to approximately 7% of its outstanding shares as of December 31, 2024.
• In 2026, the Company plans to return $1.5 billion in capital to shareholders.
  • Yum China's board of directors (the "Board") declared a 21% increase in the cash dividend, raising it to $0.29 per share on Yum China's common stock, payable on March 25, 2026, to shareholders of record as of the close of business on March 4, 2026.
  • The Company has entered into share repurchase agreements in the U.S. and Hong Kong for an aggregate repurchase amount of approximately US$460 million through open market transactions for the first half of 2026. The share repurchase agreements include approximately US$350 million under Rule 10b5-1 of the U.S. Securities Exchange Act of 1934 in the U.S. and approximately HK$880 million for a similar program in Hong Kong.
• Starting in 2027, the Company plans to return approximately 100% of annual free cash flow after subsidiaries' dividend payments to non-controlling interests. This is anticipated to translate into an average annual return of approximately $900 million to over $1 billion in 2027 and 2028, and to exceed $1 billion in 2028.

KFC

Fourth Quarter:

• System sales for KFC grew 8% YoY. Same-store sales increased 3% YoY, and same-store transactions grew 3% YoY. Ticket average was flat YoY, as growth in smaller orders was offset by increased delivery mix, which carries a relatively higher ticket average.
• Delivery sales grew 34% YoY, contributing approximately 53% of KFC's Company sales, up from 42% in the same quarter last year.
• Operating profit increased 16% YoY to $223 million. Core operating profit increased 14% YoY.
• OP margin was 10.5%, an increase of 60 basis points YoY.
• Restaurant margin was 14.0%, expanding 70 basis points YoY, primarily due to streamlined operations and favorable commodity prices, partially offset by the impact of increased rider cost due to the higher delivery mix and wage inflation in low single digits.

Full Year:

• System sales for KFC grew 5% YoY. Same-store sales grew 1% YoY.
• Delivery sales grew 26% YoY, contributing approximately 48% of KFC's Company sales.
• KFC opened 1,349 net new stores in 2025, with 504 net new stores opened by franchisees, accounting for 37%. Total store count reached 12,997 stores at year-end 2025, of which 15% are operated by franchisees.
• Operating profit was $1.3 billion, up 8% YoY. Core operating profit also increased 8% YoY.
• OP margin was 14.5%, an increase of 50 basis points YoY.
• Restaurant margin was 17.4%, expanding 50 basis points YoY, primarily due to favorable commodity prices and streamlined operations, partially offset by the impact of increased rider cost due to the higher delivery mix and value-for-money offerings.

Pizza Hut

Fourth Quarter:

• System sales for Pizza Hut grew 6% YoY. Same-store sales increased 1% YoY. Same-store transactions grew 13% YoY, the 12th consecutive quarter of growth. Ticket average was 11% lower YoY, consistent with our mass-market strategy and driven mainly by better value-for-money.
• Delivery sales grew 33% YoY, contributing approximately 54% of Pizza Hut's Company sales, up from 42% in the same quarter last year.
• Operating profit grew 52% YoY to $20 million, a fourth-quarter record high. Core operating profit increased 51% YoY.
• OP margin was 3.7%, an increase of 110 basis points YoY.
• Restaurant margin was 9.9%, expanding 60 basis points YoY, primarily due to streamlined operations and automation, favorable commodity prices, partially offset by the impact of increased cost associated with higher delivery sales mix and value-for-money offerings.

Full Year:

• System sales for Pizza Hut grew 4% YoY. Same-store sales grew 1% YoY.
• Delivery sales grew 22% YoY, contributing approximately 47% of Pizza Hut's Company sales.
• Pizza Hut opened a record 444 net new stores in 2025, with 139 net new stores opened by franchisees, accounting for 31%. Total store count reached 4,168 stores at year-end 2025, of which 8% are operated by franchisees.
• Operating profit was $183 million, up 19% YoY. Core operating profit increased 20% YoY.
• OP margin was 7.9%, an increase of 110 basis points YoY, and a record level since the Company's listing in 2016.
• Restaurant margin was 12.8%, expanding 80 basis points YoY, primarily due to favorable commodity prices, streamlined operations and automation, partially offset by the impact of value-for-money offerings and increased cost associated with higher delivery sales mix.

2026 Outlook

The Company targets:

• Total stores of over 20,000, or more than 1,900 net new stores.
• 40-50% franchise mix of net new stores for both KFC and Pizza Hut.
• Capital expenditures of approximately $600 million to $700 million.
• $1.5 billion capital return to shareholders.

Other Updates

• Yum China has been named a Top Employer in China by the Top Employers Institute for the eighth consecutive year and ranked first in the restaurant industry for the fifth year in a row. These recognitions highlight the Company's unwavering commitment to fostering an outstanding workplace and employee experience. 

Note on Non-GAAP Measures

Reported GAAP results include items that are excluded from non-GAAP measures. See "Reconciliation of Reported GAAP Results to Non-GAAP Measures" and "Segment Results" within this release for non-GAAP reconciliation details.

Conference Call

Yum China's management will hold an earnings conference call at 7:00 a.m. U.S. Eastern Time on Wednesday, February 4, 2026 (8:00 p.m. Beijing/Hong Kong Time on Wednesday, February 4, 2026).

A live webcast of the call may be accessed at https://edge.media-server.com/mmc/p/yzqfdybh.

To join by phone, please register in advance through the link provided below. Upon registering, you will be provided with participant dial-in numbers and a unique access PIN.

Pre-registration Link: https://register-conf.media-server.com/register/BI94a8d7c07e5f45f2823c62b0f012cf5f

A replay of the webcast will be available two hours after the event and will remain accessible until February 3, 2027. Earnings release accompanying slides will be available at the Company's Investor Relations website http://ir.yumchina.com.

For important news and information regarding Yum China, including our filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange, visit Yum China's Investor Relations website at http://ir.yumchina.com. Yum China uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements under the section titled "2026 Outlook." We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as "expect," "expectation," "believe," "anticipate," "may," "could," "intend," "belief," "plan," "estimate," "target," "predict," "project," "likely," "will," "continue," "should," "forecast," "outlook," "commit" or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements include, without limitation, statements regarding the future strategies, growth, business plans, investments, store openings, net new stores, franchise mix of net new stores, capital expenditures, capital returns, dividend and share repurchase plans, CAGR for system sales, operating profit and EPS, earnings, performance and returns, anticipated effects of population and macroeconomic trends, execution of the Company's RGM 3.0 strategy, the anticipated effects of our innovation, digital and delivery capabilities and investments on growth and beliefs regarding the long-term drivers of Yum China's business. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks and uncertainties that are difficult to predict and could cause our actual results or events to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or assumptions will be achieved. The forward-looking statements included in this press release are only made as of the date of this press release, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. Numerous factors could cause our actual results or events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to achieve development goals at the times and in the amounts currently anticipated, if at all, the success of our marketing campaigns and product innovation, our ability to maintain food safety and quality control systems, changes in public health conditions, our ability to control costs and expenses, including tax costs, as well as changes in political, economic and regulatory conditions in China and the U.S., and those set forth under the caption "Risk Factors" in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Our plan of capital returns to shareholders is based on current expectations, which may change based on market conditions, capital needs or otherwise. In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q) for additional detail about factors that could affect our financial and other results.

About Yum China Holdings, Inc.

Yum China is the largest restaurant company in China with a mission to make every life taste beautiful. The Company operates over 18,000 restaurants under six brands across over 2,500 cities in China. KFC and Pizza Hut are the leading brands in the quick-service and casual dining restaurant spaces in China, respectively. In addition, Yum China has partnered with Lavazza to develop the Lavazza coffee concept in China. Little Sheep and Huang Ji Huang specialize in Chinese cuisine. Taco Bell offers innovative Mexican-inspired food. Yum China has a world-class, digitalized supply chain, which includes an extensive network of logistics centers nationwide and an in-house supply chain management system. Its strong digital capabilities and loyalty program enable the Company to reach customers faster and serve them better. Yum China is a Fortune 500 company with the vision to be the world's most innovative pioneer in the restaurant industry. For more information, please visit http://ir.yumchina.com. 

Contacts

In this press release:

• Certain performance metrics and non-GAAP measures are presented excluding the impact of foreign currency translation ("F/X"). These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the F/X impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.
• System sales growth reflects the results of all restaurants regardless of ownership, including Company-owned and franchise restaurants that operate our restaurant concepts, except for non-Company-owned restaurants for which we do not receive a sales-based royalty. Sales of franchise restaurants typically generate ongoing franchise fees for the Company at an average rate of approximately 6% of system sales. Franchise restaurant sales are not included in Company sales in the Condensed Consolidated Statements of Income; however, the franchise fees are included in the Company's revenues. We believe system sales growth is useful to investors as a significant indicator of the overall strength of our business as it incorporates all of our revenue drivers, Company and franchise same-store sales as well as net unit growth.
• Effective January 1, 2018, the Company revised its definition of same-store sales growth to represent the estimated percentage change in sales of food of all restaurants in the Company system that have been open prior to the first day of our prior fiscal year, excluding the period during which stores are temporarily closed. We refer to these as our "base" stores. Previously, same-store sales growth represented the estimated percentage change in sales of all restaurants in the Company system that have been open for one year or more, including stores temporarily closed, and the base stores changed on a rolling basis from month to month. This revision was made to align with how management measures performance internally and focuses on trends of a more stable base of stores.

Reconciliation of Reported GAAP Results to Non-GAAP Measures

(in millions, except per share data)

(unaudited)

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") in this press release, the Company provides the following non-GAAP measures:

• Measures adjusted for Special Items, which include Adjusted Operating Profit, Adjusted Net Income, Adjusted Earnings Per Common Share ("EPS"), Adjusted Effective Tax Rate and Adjusted EBITDA;
• Company Restaurant Profit ("Restaurant profit") and Restaurant margin;
• Core Operating Profit and Core OP margin, which exclude Special Items, and further adjusted for Items Affecting Comparability and the impact of F/X;

These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of these non-GAAP measures provides additional information to investors to facilitate the comparison of past and present results, excluding those items that the Company does not believe are indicative of our core operations.

With respect to non-GAAP measures adjusted for Special Items, the Company excludes impact from Special Items for the purpose of evaluating performance internally and uses them as factors in determining compensation for certain employees. Special Items are not included in any of our segment results.

Adjusted EBITDA is defined as net income including noncontrolling interests adjusted for equity in net earnings (losses) from equity method investments, income tax, interest income, net, investment gain or loss, depreciation and amortization, store impairment charges, and Special Items. Store impairment charges included as an adjustment item in Adjusted EBITDA primarily resulted from our semi-annual impairment evaluation of long-lived assets of individual restaurants, and additional impairment evaluation whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If these restaurant-level assets were not impaired, depreciation of the assets would have been recorded and included in EBITDA. Therefore, store impairment charges were a non-cash item similar to depreciation and amortization of our long-lived assets of restaurants. The Company believes that investors and analysts may find it useful in measuring operating performance without regard to such non-cash items.

Restaurant Profit is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales, including cost of food and paper, restaurant-level payroll and employee benefits, rent, depreciation and amortization of restaurant-level assets, advertising expenses, and other operating expenses. Company restaurant margin percentage is defined as Restaurant profit divided by Company sales. We also use Restaurant profit and Restaurant margin for the purposes of internally evaluating the performance of our Company-owned restaurants and we believe they provide useful information to investors as to the profitability of our Company-owned restaurants.

Core Operating Profit is defined as Operating Profit adjusted for Special Items, and further excluding Items Affecting Comparability and the impact of F/X. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Items such as charges, gains and accounting changes which are viewed by management as significantly impacting the current period or the comparable period, due to changes in policy or other external factors, or non-cash items pertaining to underlying activities that are different from or unrelated to our core operations, are generally considered "Items Affecting Comparability." Examples of Items Affecting Comparability include, but are not limited to: temporary relief from landlords and government agencies; VAT deductions due to tax policy changes; and amortization of reacquired franchise rights recognized upon acquisitions. We believe presenting Core Operating Profit provides additional information to further enhance comparability of our operating results and we use this measure for purposes of evaluating the performance of our core operations. Core OP margin is defined as Core Operating Profit divided by Total revenues, excluding the impact of F/X.

The following tables set forth the reconciliation of the most directly comparable GAAP financial measures to the non-GAAP financial measures. The reconciliation of GAAP Operating Profit to Restaurant Profit and Core Operating Profit by segment is presented in Segment Results within this release.