Yum China posts 6% system sales growth in Q2 2026

Total revenue increased 13% YoY to $3.1b.

Yum China Holdings, Inc. reported that total system sales increased 6% year-on-year (YoY) in the second quarter of 2026, excluding foreign currency translation effects (F/X).

Same-store sales grew 1%, and same-store transactions rose 5%, marking the 14th consecutive quarter of transaction growth.

Total revenue increased 13% to $3.1b, or 6% excluding F/X.

The company opened 560 net new stores during the quarter, a second-quarter record and 67% more than the same period last year, with franchisees accounting for 41% of openings.

As of 30 June 2026, Yum China had 19,297 stores, with franchisees operating 18% of locations.

Operating profit increased 14% YoY to $348m, whilst core operating profit rose 7%.

Operating margin improved to 11.1%, up 20 basis points from a year earlier, marking the ninth consecutive quarter of margin expansion.

Restaurant margin remained flat at 16.1%, as higher rider costs from a larger delivery mix offset gains from operational efficiencies.

Diluted earnings per share increased 21% to $0.70, or 14% excluding F/X and 10% excluding the impact of mark-to-market equity investments.

The company returned $402m to shareholders during the quarter, including $301m in share repurchases and $101m in cash dividends.

Delivery sales increased 26% YoY and accounted for approximately 54% of company sales, compared with 45% a year earlier.

KFC system sales grew 7% YoY, improving from 5% growth in the first quarter.

KFC's same-store sales rose 1%, extending its streak of growth to five consecutive quarters, whilst same-store transactions increased 4%.

Average ticket size declined 3%, mainly due to smaller orders from new customer segments and occasions, including KCOFFEE and KPRO.

KFC added 335 net new stores during the quarter, including 152 opened by franchisees, bringing its total store count to 13,789, with franchisees operating 17% of locations.

KFC operating profit increased 14% to $332m, core operating profit rose 7%, and operating margin expanded 20 basis points to 14.2%.

Restaurant margin increased 20 basis points to 17.1%, supported by streamlined operations and favourable commodity prices, partly offset by higher rider costs and value-focused promotions.

Pizza Hut system sales increased 6% YoY, compared with 4% growth in the first quarter.

Same-store sales grew 1%, whilst same-store transactions increased 13% for the 14th consecutive quarter of growth, offsetting an 11% decline in average ticket size.

Delivery sales rose 26% and accounted for about 52% of Pizza Hut sales, up from 43% a year earlier.

Pizza Hut opened 174 net new stores during the quarter, nearly double the openings from the same period last year, including 70 franchise-operated stores.

The brand ended the quarter with 4,549 locations, with franchisees operating 11%.

Pizza Hut's operating profit grew 11% to $51m, whilst core operating profit increased 5%.

Operating margin was 8.3%, unchanged YoY, whilst the first-half operating margin expanded 60 basis points.

Restaurant margin declined 40 basis points to 12.9% due to higher delivery costs, value promotions, and investment in the Pizza Hut Burger Bar, partially offset by operational improvements, automation, and lower commodity costs.

For 2026, Yum China said it is targeting more than 20,000 total stores, representing over 1,900 net new openings, with franchisees expected to account for 40% to 50% of new KFC and Pizza Hut stores.

The company also expects capital expenditures of approximately $600m to $700m and plans to return $1.5b to shareholders through dividends and share repurchases.