Yum China Holdings, Inc. (NYSE:YUMC) reported third-quarter adjusted earnings per share of 76 cents, beating the analyst consensus estimate of 74 cents.
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Quarterly sales of $3.206 billion surpassed the Street view of $3.186 billion.
Total revenues increased 4% year-over-year (Y/Y), with a 4% increase excluding the impact of foreign exchange.
Same-store sales rose 1% Y/Y, with same-store transactions continuing to rise and grew by 4% Y/Y in the quarter.
System sales increased 4% Y/y, led by an increase of 4% in net new unit contribution and same-store sales growth.
Both operating profit and core operating profit increased by 8% Y/Y to $400 million.
Yum China's third-quarter operating margin was 12.5%, up 40 basis points year-over-year. The margin growth was supported by restaurant margin expansion.
Key Metrics
Yum China delivery sales recorded a 32% year-over-year increase, accounting for approximately 51% company's total sales.
The company reported digital sales of $2.8 billion, with digital ordering comprising roughly 95% of total sales.
Savings in food and paper costs, along with improved occupancy, helped the company achieve a quarterly restaurant margin of 17.3%, a 30-basis-point increase year-over-year.
KFC
For KFC, System sales grew 5% Y/Y, Same-store sales increased 2% Y/Y, and same-store transactions grew 3% Y/Y. The ticket average was 1% lower YoY, driven mainly by the rapid growth of smaller orders.
The operating margin was 16.0%, an increase of 30 basis points Y/Y.
The KFC restaurant margin was 18.5%, expanding 20 basis points YoY, primarily due to streamlined operations and favorable commodity prices, partially offset by the impact of higher rider cost due to the increased delivery mix and increased value-for-money offerings.
Pizza Hut
System sales for Pizza Hut grew 4% Y/Y. Same-store sales increased 1% YoY, Same-store transactions grew by 17% Y/Y, the eleventh consecutive quarter of growth. The ticket average was 13% lower year-over-year, consistent with our strategy and driven mainly by better value for money.
Pizza Hut's operating profit grew 7% Y/Y to $57 million. Core operating profit increased 7% Y/Y.
Yum China opened a net of 536 new stores during the quarter, with franchisees contributing 32%.
As of September 30, the company operated a total of 17,514 stores, comprising 12,640 KFC stores and 4,022 Pizza Hut stores.
Dividend & Repurchase
The company declared a cash dividend of 24 cents per share on Yum China's common stock, payable on December 23, to shareholders of record as of December 2, 2025.
During the first nine months of 2025, the company repurchased $682 million in shares.
As of September 30, 2025, around $610 million remained available for future share buybacks under the current authorization.
Outlook
Yum China plans to return $3 billion to shareholders between 2025 and 2026, in addition to the $1.5 billion it delivered to shareholders in 2024.
The company said it targets approximately 1,600 to 1,800 net new stores in 2025.
Yum China sees capital expenditures in the range of approximately $600 million to $700 million for the 2025 fiscal year.
YUMC Price Action: Yum China Holdings shares were up 4.05% at $45.76 during premarket trading on Tuesday, according to Benzinga Pro data.
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