Yum China system sales edge up 4% in Q1 performance

Revenue rose 10% YoY to $3.3b, helped by favourable currency movements.

Yum China reported 4% year-on-year (YoY) system sales growth excluding foreign exchange (F/X) effects in the first quarter (Q1) of 2026.

Comparable-store sales were roughly flat, hovering around last year’s level, with softness in March tied to a later-than-usual Chinese New Year and weaker demand in April due to an extended spring break.

Same-store transactions increased 2% YoY, marking the 13th straight quarter of growth.

First-quarter revenue rose 10% YoY to $3.3b, helped by favourable currency movements.

Operating profit climbed 12% to $447m, a Q1 record, whilst core operating profit increased 6%.

Operating margin expanded 30 basis points to 13.7%, extending a streak of eight consecutive quarters of margin improvement.

Restaurant-level margins slipped 40 basis points to 18.2%, mainly due to higher delivery rider costs as delivery sales continued to rise, partly offset by efficiency gains in operations.

Diluted earnings per share increased 13% to $0.87; excluding currency effects, EPS rose 7% and 11% when also excluding mark-to-market impacts from equity investments.

Delivery remained a major growth driver, surging 31% YoY and accounting for about 54% of total sales, up from 42% a year earlier.

The company opened 636 net new stores during the quarter, its highest ever for a single quarter and already more than one-third of its full-year expansion target.

KFC system sales rose 5% YoY, with same-store sales up 1% for the fourth consecutive quarter of growth.

Same-store transactions also increased 1%. The brand added 457 net new stores, up 55% year-on-year, bringing its total to 13,454 locations. Restaurant margins held at 19.1%.

Coffee and light-food expansion continued to support the brand ecosystem. KCOFFEE added roughly 400 locations, bringing its total to over 2,600, and more than doubled sales YoY whilst contributing a mid-single-digit lift to parent KFC store performance.

The company now expects KCOFFEE to reach 5,000 locations by 2027, two years ahead of its original plan.

KPRO expanded to over 280 stores from about 200 at the end of 2025, delivering roughly a 20% sales uplift to parent stores.

The concept is expanding beyond tier 1 and tier 2 cities into select tier 3 markets. Yum China raised its year-end KPRO target to 600 stores, up by 200 from prior guidance

Pizza Hut system sales increased 4% YoY. Comparable-store sales were essentially flat at about 99% of last year’s level, affected by timing shifts from the later Chinese New Year.

Same-store transactions rose 5%, marking 13 consecutive quarters of growth. Operating profit grew 18% to $71m, building on strong prior-year growth.

The WOW store format continued to scale, with more than 100 new openings in Q1. The format has doubled the store count YoY to about 390.

Pizza Hut opened 207 net new stores overall, bringing its total to 4,375, with WOW stores accounting for nearly half of the new openings in 2025.

About 80 of those WOW stores were “Gemini” locations paired with KFC, mostly in lower-tier cities and largely operated by franchisees.