Yum China Holdings, Inc. (NYSE:YUMC) traded at about 52.60 USD, up about 3.60%, giving it a market capitalization of about $19 billion. The move comes ahead of/widely around its Q4 2025 earnings release scheduled for Feb 4, 2026, with investors reacting to expectations of mid-single-digit revenue growth and recent comments that the stock still trades below some fair value estimates.
Quarterly Results
Yum China reported revenue of $2.8 billion for the fourth quarter ended December 31, 2025, a 9% year-over-year increase. Operating profit reached $187 million, a 25% increase compared to the previous period, while core operating profit grew 23% to $185 million. Diluted earnings per share (EPS) rose 33% to $0.40. System sales increased 7% excluding foreign exchange effects, supported by 3% same-store sales growth and a 4% increase in same-store purchases. Restaurant margin expanded 70 basis points to 13.0%, largely due to the effectiveness of food, paper, and lodging expenses. KFC tickets remained low, while Pizza Hut dropped 11% in ticket averages.
Yearly Performance Context
For the full year 2025, total revenue increased 4% to $11.8 billion. Operating profit grew 11% to $1.3 billion, with a corresponding operating margin of 10.9%, up 60 basis points from 2024. The company’s net income was $929 million. Diluted EPS for the fiscal year reached $2.51, an increase of 8%. The company has returned $1.5 billion to shareholders by 2025, including $353 million in cash dividends and $1.14 billion in repurchases of 24.7 million shares. The restaurant’s full-year average finished at 16.3%, an improvement of 60 points year-over-year, driven by the orderly operation and the prices of goods.
Business and Operations Update
The company opened a record 1,706 new stores in 2025, bringing its total to 18,101 locations. KFC added 1,349 new units, reaching 12,997 restaurants, while Pizza Hut opened 444 new units for a total of 4,168. Franchises opened 31% of new units. Delivery services contributed 48% of total sales for the year, up from 39% in 2024, to 53% in the fourth quarter. Digital ordering accounted for 94% of the company’s sales. The total membership of KFC and Pizza Hut exceeded 590 million, an increase of 13%. The company also expanded its KPRO location to over 200 locations.
Transfer Outlook
By 2026, Yum China targets a total store count of more than 20,000, which requires the opening of more than 1,900 new stores. The company expects to cover 40-50% franchise in these new units. Capital expenditures for 2026 are estimated between $600 million and $700 million. Management plans to return $1.5 billion to shareholders by 2026 and increase quarterly dividends by 21% to $0.29 per share. If we look to 2027 and 2028, the company expects an average annual return between $900 million and $1 billion. Long-term goals include reaching 30,000 stores by 2030.
Performance summary
KFC’s annual operating profit was $1.3 billion, while Pizza Hut’s operating profit rose 19% to $183 million. Pizza Hut gained a margin of 7.9%. The company’s net worth reached $2.0 billion. Inventory levels stand at $438 million. Total assets reached $10.8 billion. A completed corporate audit confirms these financial results.
