Yum China (YUMC) Q1 2026 earnings summary

Executive summary

• Achieved 10% year-over-year revenue growth to $3.3 billion in Q1 2026, with 4% growth excluding FX impact, and 12% operating profit growth to $447 million, marking a first-quarter record.

• Opened 636 net new stores, an all-time quarterly high, bringing total stores to 18,737 and on track for 20,000+ by year-end 2026.

• Delivery sales grew 31% year-over-year, now representing 54% of total sales and supporting top-line growth.

• Same-store sales growth was slightly positive, with same-store transactions up for the 13th consecutive quarter.

• KFC and Pizza Hut brands both delivered growth in scale and profitability.

Financial highlights

• Total revenues rose 10% year-over-year to $3.27 billion; revenue growth excluding FX was 4%.

• Operating profit reached $447 million, up 12% year-over-year; OP margin at 13.7%, up 30 bps.

• Restaurant margin was 18.2%, down 40 bps year-over-year due to higher delivery mix and rider costs.

• Net income attributable to shareholders was $309 million, flat or up 6% year-over-year depending on adjustments.

• Diluted EPS was $0.87, up 13% year-over-year, or 11% excluding Meituan/mark-to-market and FX impact.

Outlook and guidance

• Targeting over 20,000 stores by year-end 2026 and 30,000+ by 2030.

• 2026-2028 growth targets: mid- to high-single-digit system sales CAGR, high-single-digit OP CAGR, double-digit EPS and free cash flow per share CAGR.

• Plans to return $1.5 billion to shareholders in 2026, about 9% of market cap, and nearly 100% of annual free cash flow from 2027 onward.

• Rider cost pressure to persist but expected to moderate in the second half as delivery mix normalizes.

• Capital expenditures projected at $600–$700 million for 2026.