YUMC · Yum China Holdings, Inc.

Yum China delivered a robust first quarter in 2026, marked by double-digit growth in revenues and operating profits alongside record-breaking unit expansion. Total revenues climbed 10% to $3.3 billion, while operating profit surged 12% to $447 million, setting a new first-quarter record. This performance was driven by aggressive expansion, with the company opening 636 net new stores—more than double the prior year's quarter—with 39% opened by franchisees. This expansion strategy is capturing market share, evidenced by total system sales growth of 4% excluding foreign currency translation. The company's focus on operational efficiency continues to yield results, with operating profit margin expanding for the eighth consecutive quarter to 13.7%. However, restaurant margin contracted by 40 basis points to 18.2%, primarily due to increased rider costs associated with a higher delivery mix, which now accounts for 54% of total company sales. Segment performance showed divergence: KFC achieved positive same-store sales growth of 1% and opened 457 net new units, while Pizza Hut saw a 1% same-store sales decline but delivered impressive 18% operating profit growth and expanded margins. Management highlighted early signs of improving consumer sentiment and remains confident in achieving full-year targets, including over 1,900 net new store openings and returning $1.5 billion to shareholders. The declaration of a $0.29 per share dividend and active share repurchases underscore the company's commitment to shareholder returns.