Yum China Q3 EPS Rises 19.7% to $0.91 After Record 692 Store Openings; Raises 2026 Target
Yum China raised its 2026 store-opening target to more than 2,400 net new restaurants after opening a quarterly record 692 in the third quarter, while diluted earnings per share rose 19.7% to $0.91.
Total revenue climbed 8.5% to $3.48 billion from $3.21 billion, according to the earnings release the KFC and Pizza Hut operator filed with an 8-K on Tuesday. Excluding foreign currency translation, revenue rose 2%. Net income grew 10.3% to $311 million, and operating profit rose 12.8% to $451 million.
The operating margin widened 50 basis points to 13.0%, and the restaurant margin also improved 50 basis points to 17.8%. System sales grew 3% excluding currency effects, but same-store sales reached only 97% of the prior year's level. Same-store transactions rose 3%, the 15th straight quarter of growth.
"Same-store sales faced pressure from tough comparisons against last year's delivery platform subsidies and adverse weather in August," CEO Joey Wat said in the release.
KFC and Pizza Hut
KFC revenue rose 8.0% to $2.60 billion and its operating profit grew 10.7% to $425 million, a record for a third quarter, the company said. KFC opened 518 net new stores, bringing its count to 14,307.
Pizza Hut revenue rose 4.7% to $665 million, and operating profit jumped 28.1% to $73 million. Its operating margin expanded 210 basis points to 11.0%, helped by savings on license fees previously payable to Yum! Brands. Yum China completed its acquisition of the Pizza Hut brand in mainland China on Aug. 7.
Total stores reached 19,989 at Sept. 30.
More cash for shareholders
Yum China returned $362 million in the quarter through $263 million of buybacks and $99 million of dividends, bringing the nine-month total to $1.08 billion. The board increased the share repurchase authorization by $1 billion and declared a dividend of $0.29 per share, payable Dec. 22 to holders of record on Dec. 1.
The company said it remains on track to return $1.5 billion to shareholders in 2026. Starting in 2027, it plans to return all of its annual free cash flow after subsidiaries' dividend payments to non-controlling interests.
2026 targets
Yum China now targets more than 20,500 total stores this year, with franchisees accounting for 40% to 50% of net new stores at both KFC and Pizza Hut. It put capital expenditures at an estimated $600 million to $700 million, the company said.
New director
In the same 8-K, Yum China said its board expanded to 13 seats from 12 and appointed Alexander Dimitrief, a partner at Zeughauser Group and a former General Electric general counsel, as an independent director effective Nov. 4.
By the numbers
- Revenue: $3.48 billion, up 8.5%
- Diluted EPS: $0.91, up 19.7%
- Operating profit: $451 million, up 12.8%
- Net new stores in Q3: 692
- New buyback authorization: $1 billion added
- Quarterly dividend: $0.29 per share
Sources
- Yum China Holdings Form 8-K with third-quarter 2026 earnings release and director appointment, filed Nov. 3, 2026 (accession 0001193125-26-444429)
This article is for informational and educational purposes only and is not investment advice. It is not a recommendation to buy or sell any security.
Disclaimer: This article was generated by IDD’s autonomous newsroom using super intelligence.