Revenue Increased by 13%; Operating Profit Up 14%; Diluted EPS Grew 21%
Same-Store Sales Growth Improved Sequentially to 1%; OP Margin Expanded Year Over Year for the 9(th) Consecutive Quarter
Acquisition of the Pizza Hut Brand in Mainland China Expected to Close in August 2026
On Track to Return $1.5 Billion to Shareholders in 2026, 10% of Current Market Capitalization
SHANGHAI, July 30, 2026 /PRNewswire/ -- Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the second quarter ended June 30, 2026.
Second Quarter Highlights
-- Total system sales grew 6% year over year ("YoY"), excluding foreign
currency translation ("F/X").
-- Same-store sales grew 1% YoY. Same-store transactions grew 5% YoY, the
14th consecutive quarter of growth.
-- Total revenues increased 13% YoY to $3.1 billion, or a 6% increase
excluding F/X.
-- Opened 560 net new stores, a second-quarter record high and 67% higher
than the openings in the same quarter last year, with 41% opened by
franchisees. As of June 30, 2026, total store count reached 19,297, with
18% of stores operated by franchisees.
-- Operating profit grew 14% YoY to $348 million, a second-quarter record
high. Core operating profit grew 7% YoY.
-- OP margin was 11.1%, an increase of 20 basis points YoY, the ninth
consecutive quarter of OP margin expansion.
-- Restaurant margin was 16.1%, flat YoY, primarily due to increased rider
cost from a higher delivery mix, offset by streamlined operations.
-- Diluted EPS increased 21% YoY to $0.70, or up 14% excluding F/X, and up
10% further excluding the impact(1) of the mark-to-market equity
investments.
-- Returned $402 million to shareholders through $301 million in share
repurchases and $101 million in cash dividends.
-- Delivery sales grew 26% YoY. Delivery contributed approximately 54% of
total Company sales, up from 45% in the same quarter last year.
-- Active Members of KFC or Pizza Hut, defined as those who transacted in
the past 12 months, exceeded 270 million, representing a 6% YoY increase.
CEO Comments
Joey Wat, CEO of Yum China, commented, "We delivered strong results in the second quarter. For the ninth consecutive quarter, we simultaneously grew system sales, operating profit and OP margin. While the operating environment remains dynamic, our topline growth continued to outperform the industry in Q2. Same-store sales growth improved sequentially to 1%, led by the 14(th) consecutive quarter of same-store transaction growth, while store openings continued to accelerate year over year across both company-owned and franchise stores. KFC delivered strong results, with 7% system sales growth and restaurant margin expansion. Pizza Hut's same-store sales returned to positive growth and net new openings nearly doubled from last year."
Wat continued, "Our menu innovations and breakthrough side-by-side modules are helping us broaden into new occasions and new customer segments. As we rapidly roll out KCOFFEE cafe, KPRO and car-side pickup services to more KFC locations, Pizza Hut has also built a Pizza Hut Burger Bar to drive incremental sales and profit. At the same time, our KFC Small Town and Pizza Hut WOW models are helping us deepen penetration in lower-tier cities. With our multiple growth drivers, we are confident in our ability to lead the catering industry and deliver on our full-year growth targets, even as we face tougher comparisons in the second half of the year following last year's delivery platform subsidies."
Wat concluded, "We are about to reach a major breakthrough by becoming the owner of the Pizza Hut brand in Mainland China, after operating the brand in the market for 36 years. In the near term, we expect the savings in license fees to support margin expansion, with Pizza Hut's restaurant margin approaching KFC's. More potential new stores are expected to meet our payback requirements of two to three years. Over the longer term, brand ownership will give us greater strategic flexibility to capture new opportunities and innovate more nimbly across our menu, store formats, new business modules and operations. We expect this to accelerate Pizza Hut's growth trajectory and generate sustainable long-term value for our shareholders."
(1) Refers to a 4 cents favorable F/X impact, and a lower mark-to-market loss
of 2 cents in the second quarter of 2026, compared with a loss of 4 cents in
the second quarter of 2025.
Key
Financial
Results
First Half (Year to Date Ended
Second Quarter 6/30)
---------------------------- -------------------------------
%/ppts Change %/ppts Change
---------------- -------------------
2026 2025 Reported Ex F/X 2026 2025 Reported Ex F/X
---- ---- -------- ------ ---- ---- -------- ---------
System
Sales
Growth (2)
(%) 6 4 NM NM 5 3 NM NM
Same-Store
Sales
Growth (2)
(%) 1 1 NM NM 1 Even NM NM
Operating
Profit
($mn) 348 304 +14 +7 795 703 +13 +7
Adjusted
Operating
Profit (3)
($mn) 348 304 +14 +7 795 703 +13 +7
Core
Operating
Profit (3)
(4) ($mn) 328 304 NM +7 751 703 NM +7
OP Margin
(5) (%) 11.1 10.9 +0.2 +0.2 12.4 12.2 +0.2 +0.2
Core OP
Margin (3)
(6) (%) 11.1 10.9 NM +0.2 12.4 12.2 NM +0.2
Net Income
($mn) 244 215 +14 +6 553 507 +9 +3
Adjusted
Net Income
(3) ($mn) 244 215 +14 +6 553 507 +9 +3
Diluted
Earnings
Per
Common
Share ($) 0.70 0.58 +21 +14 1.57 1.35 +16 +10
Adjusted
Diluted
Earnings
Per
Common
Share (3)
($) 0.70 0.58 +21 +14 1.57 1.35 +16 +10
----------- ---- ---- -------- ------ ---- ---- -------- ---------
(2) System sales and same-store sales percentages exclude the impact of F/X.
Effective January 1, 2018, temporary store closures are normalized in the
same-store sales calculation by excluding the period during which stores are
temporarily closed.
(3) See "Reconciliation of Reported GAAP Results to Non-GAAP Measures"
included in the accompanying tables of this release for further details.
(4) Core operating profit is defined as operating profit adjusted for special
items, further excluding items affecting comparability and the impact of F/X.
The Company uses core operating profit for the purposes of evaluating the
performance of its core operations. Current period amounts are derived by
translating results at the average exchange rates of the prior year period.
(5) OP margin refers to operating profit as a percentage of total revenues.
(6) Core OP margin refers to core operating profit as a percentage of total
revenues excluding F/X.
Note: All comparisons are versus the same period a year ago.
Percentages may not recompute due to rounding.
NM refers to not meaningful.
Capital Returns to Shareholders
-- The Company is on track to return $1.5 billion each year from 2024 to
2026, which is annually around 10% of our market capitalization as of
July 29, 2026.
-- In the first half of 2026, the Company returned $718 million in capital
to shareholders through $515 million in share repurchases and $203
million in cash dividends.
-- The Board declared a cash dividend of $0.29 per share on Yum China's
common stock, payable on September 17, 2026, to shareholders of record as
of the close of business on August 27, 2026.
-- Starting in 2027, the Company plans to return approximately 100% of
annual free cash flow after subsidiaries' dividend payments to
non-controlling interests. This is anticipated to translate into an
average annual return of approximately $900 million to over $1 billion in
2027 and 2028, and to exceed $1 billion in 2028.
KFC
First Half (Year to Date Ended
Second Quarter 6/30)
-------------------------------- ----------------------------------
%/ppts Change %/ppts Change
---------------- ------------------
2026 2025 Reported Ex F/X 2026 2025 Reported Ex F/X
------ ------ -------- ------ ------ ------ -------- --------
Restaurants 13,789 12,238 +13 NM 13,789 12,238 +13 NM
System Sales
Growth (%) 7 5 NM NM 6 4 NM NM
Same-Store
Sales
Growth (%) 1 1 NM NM 1 Even NM NM
Total
Revenues
($mn) 2,338 2,096 +12 +5 4,791 4,342 +10 +4
Operating
Profit
($mn) 332 292 +14 +7 749 678 +10 +5
Core
Operating
Profit
($mn) 313 292 NM +7 709 678 NM +5
OP Margin
(%) 14.2 14.0 +0.2 +0.2 15.6 15.6 -- --
Restaurant
Margin (%) 17.1 16.9 +0.2 +0.2 18.1 18.4 (0.3) (0.3)
------------ ------ ------ -------- ------ ------ ------ -------- --------
-- System sales for KFC grew 7% YoY, improving sequentially from 5% in the
first quarter. Same-store sales increased 1% YoY, the fifth consecutive
quarter of growth. Same-store transactions grew 4% YoY. Ticket average
was 3% lower YoY, mainly due to incremental smaller orders from new
customer segments and occasions, including KCOFFEE and KPRO.
-- Delivery sales grew 26% YoY, contributing approximately 54% of KFC's
Company sales, up from 45% in the same quarter last year.
-- KFC opened 335 net new stores during the quarter, including 152 opened by
franchisees, representing 45% of net new store openings. Total store
count reached 13,789 as of June 30, 2026, with 17% of stores operated by
franchisees.
-- Operating profit increased 14% YoY to $332 million. Core operating profit
increased 7% YoY.
-- OP margin was 14.2%, an increase of 20 basis points YoY.
-- Restaurant margin was 17.1%, an increase of 20 basis points YoY,
primarily due to streamlined operations and favorable commodity prices,
partially offset by the impact of increased rider cost resulting from
higher delivery mix and value-for-money offerings.
Pizza Hut
First Half (Year to Date Ended
Second Quarter 6/30)
------------------------------ ---------------------------------
%/ppts Change %/ppts Change
---------------- -------------------
2026 2025 Reported Ex F/X 2026 2025 Reported Ex F/X
----- ----- -------- ------ ----- ----- -------- ---------
Restaurants 4,549 3,864 +18 NM 4,549 3,864 +18 NM
System Sales
Growth (%) 6 3 NM NM 5 3 NM NM
Same-Store
Sales
Growth (%) 1 2 NM NM Even 1 NM NM
Total
Revenues
($mn) 613 554 +11 +4 1,248 1,149 +9 +3
Operating
Profit
($mn) 51 46 +11 +5 122 106 +15 +9
Core
Operating
Profit
($mn) 48 46 NM +5 115 106 NM +9
OP Margin
(%) 8.3 8.3 -- +0.1 9.8 9.2 +0.6 +0.6
Restaurant
Margin (%) 12.9 13.3 (0.4) (0.4) 14.0 13.9 +0.1 +0.1
------------ ----- ----- -------- ------ ----- ----- -------- ---------
-- System sales for Pizza Hut grew 6% YoY, improving sequentially from 4% in
the first quarter. Same-store sales growth returned to positive at 1%.
Same-store transactions grew 13% YoY, marking the 14th consecutive
quarter of growth, and more than offset the 11% decline in ticket
average. In line with our mass-market strategy, ticket average moved
closer to our target range, primarily driven by value-for-money offerings
and incremental smaller orders such as those from solo diners.
-- Delivery sales grew 26% YoY, contributing approximately 52% of Pizza
Hut's Company sales, up from 43% in the same quarter last year.
-- Pizza Hut opened 174 net new stores during the quarter, nearly double the
net openings in the same quarter last year, including 70 opened by
franchisees, representing 40% of net new store openings. Total store
count reached 4,549 as of June 30, 2026, with 11% of stores operated by
franchisees.
-- Operating profit grew 11% YoY to $51 million. Core operating profit
increased 5% YoY.
-- OP margin was 8.3%, flat YoY. OP margin expanded by 60 bps YoY in the
first half of the year.
-- Restaurant margin was 12.9%, a decrease of 40 basis points YoY, primarily
due to the impact of increased costs associated with higher delivery
sales mix, value-for-money offerings and investment in Pizza Hut Burger
Bar, partially offset by streamlined operations, automation and favorable
commodity prices. Restaurant margin increased by 10 basis points YoY in
the first half of the year.
2026 Outlook
The Company targets:
-- Total stores of over 20,000, or more than 1,900 net new stores. -- 40-50% franchise mix of net new stores for both KFC and Pizza Hut. -- Capital expenditures of approximately $600 million to $700 million. -- $1.5 billion capital return to shareholders.
Other Update
-- The Company is on track to close the acquisition of the Pizza Hut brand
in Mainland China in August and plans to secure an approximately $1.2
billion equivalent offshore bridge loan to finance the transaction.
Note on Non-GAAP Measures
Reported GAAP results include items that are excluded from non-GAAP measures. See "Reconciliation of Reported GAAP Results to Non-GAAP Measures" and "Segment Results" within this release for non-GAAP reconciliation details.
Conference Call
Yum China's management will hold an earnings conference call at 7:00 a.m. U.S. Eastern Time on Thursday, July 30, 2026 (7:00 p.m. Beijing/Hong Kong Time on Thursday, July 30, 2026).
A live webcast of the call may be accessed at https://edge.media-server.com/mmc/p/zubr6dix.
To join by phone, please register in advance through the link provided below. Upon registering, you will be provided with participant dial-in numbers and a unique access PIN.
Pre-registration Link: https://register-conf.media-server.com/register/BI611346d62d61456ca32d90b61aca7523
A replay of the webcast will be available two hours after the event and will remain accessible until July 29, 2027. Earnings release and accompanying slides will be available at the Company's Investor Relations website http://ir.yumchina.com.
For important news and information regarding Yum China, including our filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange, visit Yum China's Investor Relations website at http://ir.yumchina.com. Yum China uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements under the section titled "2026 Outlook." We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as "expect, " "expectation," "believe," "anticipate," "may," "could," "intend," "belief," "plan," "estimate," "target," "predict," "project," "likely," "will," "continue," "should," "forecast," "outlook," "commit" or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements include, without limitation, statements regarding the future strategies, growth, business plans, investments, store openings, net new stores, franchise mix of net new stores, capital expenditures, capital returns, dividend and share repurchase plans, CAGR for system sales, operating profit and EPS, earnings, performance and returns, anticipated effects of population and macroeconomic trends, execution of the Company's RGM 3.0 strategy, the anticipated effects of our innovation, digital and delivery capabilities and investments on growth and beliefs regarding the long-term drivers of Yum China's business. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks and uncertainties that are difficult to predict and could cause our actual results or events to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or assumptions will be achieved. The forward-looking statements included in this press release are only made as of the date of this press release, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. Numerous factors could cause our actual results or events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to achieve development goals at the times and in the amounts currently anticipated, if at all, the success of our marketing campaigns and product innovation, our ability to maintain food safety and quality control systems, changes in public health conditions, our ability to control costs and expenses, including tax costs, as well as changes in political, economic, trade relations, regulatory conditions in China and the U.S., and those set forth under the caption "Risk Factors" in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Our plan of capital returns to shareholders is based on current expectations, which may change based on market conditions, capital needs or otherwise. In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K
and subsequent Quarterly Reports on Form 10-Q) for additional detail about factors that could affect our financial and other results.
About Yum China Holdings, Inc.
Yum China is the largest restaurant company in China with a mission to make every life taste beautiful. The Company operates over 19,000 restaurants under six brands across over 2,700 cities in China. KFC and Pizza Hut are the leading brands in the quick-service and casual dining restaurant spaces in China, respectively. In addition, Yum China has partnered with Lavazza to develop the Lavazza coffee concept in China. Little Sheep and Huang Ji Huang specialize in Chinese cuisine. Taco Bell offers innovative Mexican-inspired food. Yum China has a world-class, digitalized supply chain, which includes an extensive network of logistics centers nationwide and an in-house supply chain management system. Its strong digital capabilities and loyalty program enable the Company to reach customers faster and serve them better. Yum China is a Fortune 500 company with the vision to be the world's most innovative pioneer in the restaurant industry. For more information, please visit http://ir.yumchina.com.
Contacts
Investor Relations Contact:
-------------------------------
Tel: +86 21 2407 7556
IR@YumChina.com
Media Contact:
-------------------------------
Tel: +86 21 2407 3824
Media@YumChina.com
Yum China Holdings, Inc.
Condensed Consolidated Statements of Income
(in US$ million, except per share data)
(unaudited)
Quarter Ended % Change Year to Date Ended % Change
---------------------------- ----------------------------
6/30/2026 6/30/2025 B/$(W)$ 6/30/2026 6/30/2025 B/$(WTI3)$
------------- ------------- ------------- ------------- ------------- -------------
Revenues
Company sales $ 2,910 $ 2,613 11 $ 5,957 $ 5,414 10
Franchise fees and
income 29 24 18 59 51 15
Revenues from
transactions with
franchisees 155 115 35 311 236 32
Other revenues 44 35 27 82 67 23
------------- ------------- ------------- -------------
Total revenues 3,138 2,787 13 6,409 5,768 11
------------- ------------- ------------- -------------
Costs and
Expenses, Net
Company
restaurants
Food and paper 918 810 (13) 1,881 1,684 (12)
Payroll and
employee
benefits 804 712 (13) 1,617 1,431 (13)
Occupancy and
other operating
expenses 719 669 (7) 1,437 1,357 (6)
------------- ------------- ------------- -------------
Company restaurant
expenses 2,441 2,191 (11) 4,935 4,472 (10)
General and
administrative
expenses 139 131 (7) 276 269 (3)
Franchise expenses 12 10 (24) 24 21 (18)
Expenses for
transactions with
franchisees 148 110 (35) 298 227 (31)
Other operating
costs and
expenses 38 30 (26) 69 59 (18)
Closures and
impairment
expenses, net 12 12 (7) 12 18 32
Other income, net -- (1) NM -- (1) NM
------------- ------------- ------------- -------------
Total costs and
expenses, net 2,790 2,483 (12) 5,614 5,065 (11)
------------- ------------- ------------- -------------
Operating Profit 348 304 14 795 703 13
Interest income,
net 12 25 (52) 28 51 (48)
Investment loss (6) (18) 65 (17) (15) (6)
------------- ------------- ------------- -------------
Income Before
Income Taxes and
Equity in Net
Earnings (Losses)
from Equity
Method
Investments 354 311 14 806 739 9
Income tax
provision (92) (80) (14) (215) (199) (8)
Equity in net
earnings (losses)
from equity
method
investments 2 2 23 4 6 (15)
------------- ------------- ------------- -------------
Net income --
including
noncontrolling
interests 264 233 14 595 546 9
Net income --
noncontrolling
interests 20 18 (11) 42 39 (7)
Net Income -- Yum
China Holdings,
Inc. $ 244 $ 215 14 $ 553 $ 507 9
============= ============= ============= =============
Effective tax rate 26.0 % 25.8 % (0.2) ppts. 26.6 % 26.9 % 0.3 ppts.
============= ============= ============= =============
Basic Earnings Per
Common Share $ 0.70 $ 0.58 $ 1.58 $ 1.36
============= ============= ============= =============
Weighted-average
shares
outstanding
(in millions) 348 373 350 374
============= ============= ============= =============
Diluted Earnings
Per Common Share $ 0.70 $ 0.58 $ 1.57 $ 1.35
============= ============= ============= =============
Weighted-average
shares
outstanding
(in millions) 349 374 351 376
============= ============= ============= =============
OP margin 11.1 % 10.9 % 0.2 ppts. 12.4 % 12.2 % 0.2 ppts.
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 31.5 31.0 (0.5) ppts. 31.6 31.1 (0.5) ppts.
Payroll and
employee
benefits 27.6 27.2 (0.4) ppts. 27.1 26.4 (0.7) ppts.
Occupancy and
other operating
expenses 24.8 25.7 0.9 ppts. 24.1 25.1 1.0 ppts.
------------- ------------- ------------- -------------
Restaurant margin 16.1 % 16.1 % -- ppts. 17.2 % 17.4 % (0.2) ppts.
============= ============= ============= =============
Percentages may not recompute due to rounding. NM refers to not meaningful.
Yum China Holdings, Inc.
KFC Operating Results
(in US$ million)
(unaudited)
Quarter Ended % Change Year to Date Ended % Change
------------------------------ ------------------------------
6/30/2026 6/30/2025 B/(W) 6/30/2026 6/30/2025 B/(W)
-------------- -------------- ------------ -------------- -------------- ------------
Revenues
Company sales $ 2,294 $ 2,059 11 $ 4,704 $ 4,267 10
Franchise fees
and income 24 19 23 47 40 20
Revenues from
transactions
with
franchisees 19 17 18 38 33 16
Other revenues 1 1 (5) 2 2 (4)
-------------- -------------- -------------- --------------
Total revenues 2,338 2,096 12 4,791 4,342 10
-------------- -------------- -------------- --------------
Costs and
Expenses, Net
Company
restaurants
Food and paper 710 631 (12) 1,456 1,316 (11)
Payroll and
employee
benefits 630 556 (13) 1,273 1,110 (15)
Occupancy and
other operating
expenses 563 523 (8) 1,123 1,055 (6)
-------------- -------------- -------------- --------------
Company
restaurant
expenses 1,903 1,710 (11) 3,852 3,481 (11)
General and
administrative
expenses 67 61 (9) 128 120 (6)
Franchise
expenses 10 9 (22) 21 19 (18)
Expenses for
transactions
with
franchisees 15 15 (3) 30 29 (4)
Other operating
costs and
expenses 1 1 53 1 2 58
Closures and
impairment
expenses, net 10 8 (30) 10 13 27
-------------- -------------- -------------- --------------
Total costs and
expenses, net 2,006 1,804 (11) 4,042 3,664 (10)
-------------- -------------- -------------- --------------
Operating Profit $ 332 $ 292 14 $ 749 $ 678 10
============== ============== ============== ==============
OP margin 14.2 % 14.0 % 0.2 ppts. 15.6 % 15.6 % -- ppts.
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 30.9 30.7 (0.2) ppts. 31.0 30.9 (0.1) ppts.
Payroll and
employee
benefits 27.5 27.0 (0.5) ppts. 27.1 26.0 (1.1) ppts.
Occupancy and
other operating
expenses 24.5 25.4 0.9 ppts. 23.8 24.7 0.9 ppts.
-------------- -------------- -------------- --------------
Restaurant
margin 17.1 % 16.9 % 0.2 ppts. 18.1 % 18.4 % (0.3) ppts.
============== ============== ============== ==============
Percentages may not recompute due to rounding.
Yum China Holdings, Inc.
Pizza Hut Operating Results
(in US$ million)
(unaudited)
Quarter Ended % Change Year to Date Ended % Change
-------------------------------- ------------------------------
6/30/2026 6/30/2025 B/(W) 6/30/2026 6/30/2025 B/(W)
--------------- --------------- ------------ -------------- -------------- ------------
Revenues
Company sales $ 604 $ 545 11 $ 1,231 $ 1,129 9
Franchise fees
and income 3 2 47 6 4 41
Revenues from
transactions
with
franchisees 3 1 52 5 3 44
Other revenues 3 6 (41) 6 13 (51)
Total revenues 613 554 11 1,248 1,149 9
--------------- --------------- -------------- --------------
Costs and
Expenses, Net
Company
restaurants
Food and paper 204 177 (15) 417 363 (15)
Payroll and
employee
benefits 171 154 (11) 339 317 (7)
Occupancy and
other operating
expenses 151 141 (7) 303 292 (4)
--------------- --------------- -------------- --------------
Company
restaurant
expenses 526 472 (11) 1,059 972 (9)
General and
administrative
expenses 28 26 (11) 54 52 (6)
Franchise
expenses 2 1 (43) 3 2 (37)
Expenses for
transactions
with
franchisees 2 1 (37) 4 3 (25)
Other operating
costs and
expenses 3 5 41 5 11 53
Closures and
impairment
expenses, net 1 3 52 1 3 56
Total costs and
expenses, net 562 508 (10) 1,126 1,043 (8)
--------------- --------------- -------------- --------------
Operating Profit $ 51 $ 46 11 $ 122 $ 106 15
=============== =============== ============== ==============
OP margin 8.3 % 8.3 % -- ppts. 9.8 % 9.2 % 0.6 ppts.
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 33.8 32.5 (1.3) ppts. 33.9 32.1 (1.8) ppts.
Payroll and
employee
benefits 28.3 28.3 -- ppts. 27.5 28.1 0.6 ppts.
Occupancy and
other operating
expenses 25.0 25.9 0.9 ppts. 24.6 25.9 1.3 ppts.
--------------- --------------- -------------- --------------
Restaurant
margin 12.9 % 13.3 % (0.4) ppts. 14.0 % 13.9 % 0.1 ppts.
=============== =============== ============== ==============
Percentages may not recompute due to rounding.
Yum China Holdings, Inc.
Condensed Consolidated Balance Sheets
(in US$ million)
6/30/2026 12/31/2025
---------------- ----------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 485 $ 506
Short-term investments 901 878
Accounts receivable, net 115 95
Inventories, net 459 438
Prepaid expenses and other current
assets 390 440
---------------- ----------------
Total Current Assets 2,350 2,357
Property, plant and equipment, net 2,623 2,543
Operating lease right-of-use assets 2,114 2,189
Goodwill 2,021 1,963
Intangible assets, net 151 148
Long-term bank deposits and notes 688 678
Equity investments 382 387
Deferred income tax assets 168 156
Other assets 374 362
Total Assets 10,871 10,783
================ ================
LIABILITIES, REDEEMABLE
NONCONTROLLING INTEREST AND EQUITY
Current Liabilities
Accounts payable and other current
liabilities 2,263 2,127
Short-term borrowings 66 30
Income taxes payable 107 89
---------------- ----------------
Total Current Liabilities 2,436 2,246
Non-current operating lease
liabilities 1,747 1,823
Non-current finance lease liabilities 50 51
Deferred income tax liabilities 418 406
Other liabilities 159 158
---------------- ----------------
Total Liabilities 4,810 4,684
---------------- ----------------
Redeemable Noncontrolling Interest -- --
Equity
Common stock, $0.01 par value; 1,000
million shares authorized; 345
million shares and 355 million
shares issued at June 30, 2026 and
December 31, 2025, respectively;
345 million shares and 354
million shares outstanding at June
30, 2026 and December 31, 2025,
respectively. 3 4
Treasury stock (13) (28)
Additional paid-in capital 3,696 3,796
Retained earnings 1,696 1,764
Accumulated other comprehensive loss (25) (157)
Total Yum China Holdings, Inc.
Stockholders' Equity 5,357 5,379
Noncontrolling interests 704 720
---------------- ----------------
Total Equity 6,061 6,099
Total Liabilities, Redeemable
Noncontrolling Interest and Equity $ 10,871 $ 10,783
================ ================
Yum China Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(in US$ million)
(unaudited)
Year to Date Ended
------------------------------------------------
6/30/2026 6/30/2025
----------------------- -----------------------
Cash Flows --
Operating
Activities
Net income --
including
noncontrolling
interests $ 595 $ 546
Depreciation and
amortization 237 219
Non-cash operating
lease cost 211 199
Closures and
impairment
expenses 12 18
Investment loss 17 15
Equity in net
(earnings) losses
from equity method
investments (4) (6)
Distributions of
income received
from equity method
investments 8 9
Deferred income
taxes (9) (3)
Share-based
compensation
expense 23 22
Changes in accounts
receivable (17) (13)
Changes in
inventories (8) 52
Changes in prepaid
expenses, other
current assets and
value-added tax
assets 72 (8)
Changes in accounts
payable and other
current
liabilities 39 (53)
Changes in income
taxes payable 15 24
Changes in
non-current
operating lease
liabilities (187) (200)
Other, net (28) 43
Net Cash Provided by
Operating
Activities 976 864
----------------------- -----------------------
Cash Flows --
Investing
Activities
Capital spending (271) (259)
Purchases of
short-term
investments,
long-term bank
deposits and notes (3,777) (3,924)
Maturities of
short-term
investments,
long-term bank
deposits and notes 3,781 3,905
Acquisition of
equity investment -- (14)
Other, net 2 2
Net Cash Used in
Investing
Activities (265) (290)
----------------------- -----------------------
Cash Flows --
Financing
Activities
Proceeds from
short-term
borrowings 65 --
Repayment of
short-term
borrowings (30) (129)
Repurchase of shares
of common stock (530) (368)
Cash dividends paid
on common stock (203) (180)
Dividends paid to
noncontrolling
interests (32) (25)
Other, net (9) (7)
Net Cash Used in
Financing
Activities (739) (709)
----------------------- -----------------------
Effect of Exchange
Rates on Cash, Cash
Equivalents and
Restricted Cash 7 4
----------------------- -----------------------
Net Decrease in
Cash, Cash
Equivalents and
Restricted Cash (21) (131)
Cash, Cash
Equivalents, and
Restricted Cash -
Beginning of
Period 506 723
----------------------- -----------------------
Cash, Cash
Equivalents, and
Restricted Cash -
End of Period $ 485 $ 592
======================= =======================
In this press release:
-- Certain performance metrics and non-GAAP measures are presented excluding
the impact of foreign currency translation ("F/X"). These amounts are
derived by translating current year results at prior year average
exchange rates. We believe the elimination of the F/X impact provides
better year-to-year comparability without the distortion of foreign
currency fluctuations.
-- System sales growth reflects the results of all restaurants regardless of
ownership, including Company-owned and franchise restaurants that operate
our restaurant concepts, except for non-Company-owned restaurants for
which we do not receive a sales-based royalty. Sales of franchise
restaurants typically generate ongoing franchise fees for the Company at
an average rate of approximately 6% of system sales. Franchise restaurant
sales are not included in Company sales in the Condensed Consolidated
Statements of Income; however, the franchise fees are included in the
Company's revenues. We believe system sales growth is useful to investors
as a significant indicator of the overall strength of our business as it
incorporates all of our revenue drivers, Company and franchise same-store
sales as well as net unit growth.
-- Effective January 1, 2018, the Company revised its definition of
same-store sales growth to represent the estimated percentage change in
sales of food of all restaurants in the Company system that have been
open prior to the first day of our prior fiscal year, excluding the
period during which stores are temporarily closed. We refer to these as
our "base" stores. Previously, same-store sales growth represented the
estimated percentage change in sales of all restaurants in the Company
system that have been open for one year or more, including stores
temporarily closed, and the base stores changed on a rolling basis from
month to month. This revision was made to align with how management
measures performance internally and focuses on trends of a more stable
base of stores.
Unit Count by Brand
KFC
12/31/2025 New Builds Closures Refranchised 6/30/2026
---------- ---------- -------- ------------ ---------
Company-owned 11,032 657 (181) (8) 11,500
Franchisees 1,965 338 (22) 8 2,289
Total 12,997 995 (203) -- 13,789
========== ========== ======== ============ =========
Pizza Hut
12/31/2025 New Builds Closures 6/30/2026
---------- ---------- -------- ------------
Company-owned 3,830 315 (109) 4,036
Franchisees 338 180 (5) 513
Total 4,168 495 (114) 4,549
========== ========== ======== ============
Others
12/31/2025 New Builds Closures 6/30/2026
---------- ---------- -------- ------------
Company-owned 198 61 (19) 240
Franchisees 738 95 (114) 719
Total 936 156 (133) 959
========== ========== ======== ============
Reconciliation of Reported GAAP Results to Non-GAAP Measures
(in millions, except per share data)
(unaudited)
In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") in this press release, the Company provides the following non-GAAP measures:
-- Measures adjusted for Special Items, which include Adjusted Operating
Profit, Adjusted Net Income, Adjusted Earnings Per Common Share ("EPS"),
Adjusted Effective Tax Rate and Adjusted EBITDA;
-- Company Restaurant Profit ("Restaurant profit") and Restaurant margin;
-- Core Operating Profit and Core OP margin, which exclude Special Items,
and further adjusted for Items Affecting Comparability and the impact of
F/X;
These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of these non-GAAP measures provides additional information to investors to facilitate the comparison of past and present results, excluding those items that the Company does not believe are indicative of our core operations.
With respect to non-GAAP measures adjusted for Special Items, the Company excludes impact from Special Items for the purpose of evaluating performance internally and uses them as factors in determining compensation for certain employees. Special Items are not included in any of our segment results.
Adjusted EBITDA is defined as net income including noncontrolling interests adjusted for equity in net earnings (losses) from equity method investments, income tax, interest income, net, investment gain or loss, depreciation and amortization, store impairment charges, and Special Items. Store impairment charges included as an adjustment item in Adjusted EBITDA primarily resulted from our semi-annual impairment evaluation of long-lived assets of individual restaurants, and additional impairment evaluation whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If these restaurant-level assets were not impaired, depreciation of the assets would have been recorded and included in EBITDA. Therefore, store impairment charges were a non-cash item similar to depreciation and amortization of our long-lived assets of restaurants. The Company believes that investors and analysts may find it useful in measuring operating performance without regard to such non-cash items.
Restaurant Profit is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales, including cost of food and paper, restaurant-level payroll and employee benefits, rent, depreciation and amortization of restaurant-level assets, advertising expenses, and other operating expenses. Company restaurant margin percentage is defined as Restaurant profit divided by Company sales. We also use Restaurant profit and Restaurant margin for the purposes of internally evaluating the performance of our Company-owned restaurants and we believe they provide useful information to investors as to the profitability of our Company-owned restaurants.
Core Operating Profit is defined as Operating Profit adjusted for Special Items, and further excluding Items Affecting Comparability and the impact of F/X. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Items such as charges, gains and accounting changes which are viewed by management as significantly impacting the current period or the comparable period, due to changes in policy or other external factors, or non-cash items pertaining to underlying activities that are different from or unrelated to our core operations, are generally considered "Items Affecting Comparability." Examples of Items Affecting Comparability include, but are not limited to: temporary relief from landlords and government agencies; VAT deductions due to tax policy changes; and amortization of reacquired franchise rights recognized upon acquisitions. We believe presenting Core Operating Profit provides additional information to further enhance comparability of our operating results and we use this measure for purposes of evaluating the performance of our core operations. Core OP margin is defined as Core Operating Profit divided by Total revenues, excluding the impact of F/X.
The following tables set forth the reconciliation of the most directly comparable GAAP financial measures to the non-GAAP financial measures. The reconciliation of GAAP Operating Profit to Restaurant Profit and Core Operating Profit by segment is presented in Segment Results within this release.
Quarter Ended Year to Date Ended
------------------------------------- ------------------------------
6/30/2026 6/30/2025 6/30/2026 6/30/2025
------------------ ----------------- -------------- --------------
Reconciliation
of Operating
Profit to
Adjusted
Operating
Profit
Operating Profit $ 348 $ 304 $ 795 $ 703
Special Items,
Operating
Profit -- -- -- --
Adjusted
Operating
Profit $ 348 $ 304 $ 795 $ 703
================== ================= ============== ==============
Reconciliation
of Net Income
to Adjusted Net
Income
Net Income --
Yum China
Holdings, Inc. $ 244 $ 215 $ 553 $ 507
Special Items,
Net Income
--Yum China
Holdings, Inc. -- -- -- --
Adjusted Net
Income -- Yum
China Holdings,
Inc. $ 244 $ 215 $ 553 $ 507
================== ================= ============== ==============
Reconciliation
of EPS to
Adjusted EPS
Basic Earnings
Per Common
Share $ 0.70 $ 0.58 $ 1.58 $ 1.36
Special Items,
Basic Earnings
Per Common
Share -- -- -- --
Adjusted Basic
Earnings Per
Common Share $ 0.70 $ 0.58 $ 1.58 $ 1.36
================== ================= ============== ==============
Diluted Earnings
Per Common
Share $ 0.70 $ 0.58 $ 1.57 $ 1.35
Special Items,
Diluted
Earnings Per
Common Share -- -- -- --
Adjusted Diluted
Earnings Per
Common Share $ 0.70 $ 0.58 $ 1.57 $ 1.35
================== ================= ============== ==============
Reconciliation
of Effective
Tax Rate to
Adjusted
Effective Tax
Rate
Effective tax
rate 26.0 % 25.8 % 26.6 % 26.9 %
Impact on
effective tax
rate as a
result of
Special Items -- -- -- --
------------------ ----------------- -------------- --------------
Adjusted
effective tax
rate 26.0 % 25.8 % 26.6 % 26.9 %
================== ================= ============== ==============
Net income, along with the reconciliation to Adjusted EBITDA, is presented below:
Quarter Ended Year to Date Ended
------------------------------ ------------------------------
6/30/2026 6/30/2025 6/30/2026 6/30/2025
-------------- -------------- -------------- --------------
Net Income --
Yum China
Holdings, Inc. $ 244 $ 215 $ 553 $ 507
Net income --
noncontrolling
interests 20 18 42 39
Equity in net
(earnings)
losses from
equity method
investments (2) (2) (4) (6)
Income tax
provision 92 80 215 199
Interest income,
net (12) (25) (28) (51)
Investment loss 6 18 17 15
Operating Profit 348 304 795 703
Special Items,
Operating
Profit -- -- -- --
Adjusted
Operating
Profit 348 304 795 703
Depreciation and
amortization 120 110 237 219
Store impairment
charges 14 13 18 19
Adjusted EBITDA $ 482 $ 427 $ 1,050 $ 941
============== ============== ============== ==============
Operating Profit, along with the reconciliation to Core Operating Profit, is presented below:
Quarter ended % Change Year to Date Ended % Change
---------------------------- ------------------------------
6/30/2026 6/30/2025 B/(W) 6/30/2026 6/30/2025 B/(W)
------------- ------------- -------- --------------- ------------- --------
Operating
Profit $ 348 $ 304 14 $ 795 $ 703 13
Special Items,
Operating
Profit -- -- -- --
Adjusted
Operating
Profit $ 348 $ 304 14 $ 795 $ 703 13
------------- ------------- --------------- -------------
Items
Affecting
Comparability -- -- -- --
F/X impact (20) -- (44) --
Core Operating
Profit $ 328 $ 304 7 $ 751 $ 703 7
============= ============= =============== =============
Total revenues 3,138 2,787 13 6,409 5,768 11
F/X impact (183) -- (342) --
Total revenues,
excluding the
impact of F/X $ 2,955 $ 2,787 6 $ 6,067 $ 5,768 5
============= ============= =============== =============
Core OP margin 11.1 % 10.9 % 0.2 ppts. 12.4 % 12.2 % 0.2 ppts.
Yum China Holdings, Inc.
Segment Results
(in US$ million)
(unaudited)
Quarter Ended 6/30/2026
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Company sales $ 2,294 $ 604 $ 12 $ -- $ -- $ 2,910
Franchise fees
and income 24 3 2 -- -- 29
Revenues from
transactions
with
franchisees(2) 19 3 25 108 -- 155
Other revenues 1 3 235 25 (220) 44
Total revenues $ 2,338 $ 613 $ 274 $ 133 $ (220) $ 3,138
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Company
restaurant
expenses 1,903 526 12 -- -- 2,441
General and
administrative
expenses 67 28 8 36 -- 139
Franchise
expenses 10 2 -- -- -- 12
Expenses for
transactions
with
franchisees(2) 15 2 23 108 -- 148
Other operating
costs and
expenses 1 3 231 23 (220) 38
Closures and
impairment
expenses, net 10 1 1 -- -- 12
Total costs and
expenses, net 2,006 562 275 167 (220) 2,790
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Operating Profit
(Loss) $ 332 $ 51 $ (1) $ (34) $ -- $ 348
============== =============== ====================== ====================== ================== ==============
Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:
Quarter Ended 6/30/2026
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
GAAP Operating
Profit (Loss) $ 332 $ 51 $ (1) $ (34) $ -- $ 348
Less:
Franchise fees
and income 24 3 2 -- -- 29
Revenues from
transactions
with
franchisees(2) 19 3 25 108 -- 155
Other revenues 1 3 235 25 (220) 44
Add:
General and
administrative
expenses 67 28 8 36 -- 139
Franchise
expenses 10 2 -- -- -- 12
Expenses for
transactions
with
franchisees(2) 15 2 23 108 -- 148
Other operating
costs and
expenses 1 3 231 23 (220) 38
Closures and
impairment
expenses, net 10 1 1 -- -- 12
Restaurant
profit $ 391 $ 78 $ -- $ -- $ -- $ 469
Company sales 2,294 604 12 -- -- 2,910
============== =============== ====================== ====================== ================== ==============
Restaurant
margin 17.1 % 12.9 % (2.3) % N/A N/A 16.1 %
============== =============== ====================== ====================== ================== ==============
Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:
Quarter Ended 6/30/2026
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
GAAP Operating
Profit (Loss) $ 332 $ 51 $ (1) $ (34) $ -- $ 348
Special Items,
Operating
Profit -- -- -- -- -- --
Adjusted
Operating
Profit (Loss) $ 332 $ 51 $ (1) $ (34) $ -- $ 348
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Items Affecting
Comparability -- -- -- -- -- --
F/X impact (19) (3) -- 2 -- (20)
Core Operating
Profit (Loss) $ 313 $ 48 $ (1) $ (32) $ -- $ 328
============== =============== ====================== ====================== ================== ==============
Quarter Ended 6/30/2025
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Company sales $ 2,059 $ 545 $ 9 $ -- $ -- $ 2,613
Franchise fees
and income 19 2 3 -- -- 24
Revenues from
transactions
with
franchisees(2) 17 1 17 80 -- 115
Other revenues 1 6 172 17 (161) 35
Total revenues $ 2,096 $ 554 $ 201 $ 97 $ (161) $ 2,787
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Company
restaurant
expenses 1,710 472 9 -- -- 2,191
General and
administrative
expenses 61 26 8 36 -- 131
Franchise
expenses 9 1 -- -- -- 10
Expenses for
transactions
with
franchisees(2) 15 1 16 78 -- 110
Other operating
costs and
expenses 1 5 168 17 (161) 30
Closures and
impairment
expenses, net 8 3 1 -- -- 12
Other income,
net -- -- -- (1) -- (1)
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Total costs and
expenses, net 1,804 508 202 130 (161) 2,483
Operating Profit
(Loss) $ 292 $ 46 $ (1) $ (33) $ -- $ 304
============== =============== ====================== ====================== ================== ==============
Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:
Quarter Ended 6/30/2025
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
GAAP Operating
Profit (Loss) $ 292 $ 46 $ (1) $ (33) $ -- $ 304
Less:
Franchise fees
and income 19 2 3 -- -- 24
Revenues from
transactions
with
franchisees(2) 17 1 17 80 -- 115
Other revenues 1 6 172 17 (161) 35
Add:
General and
administrative
expenses 61 26 8 36 -- 131
Franchise
expenses 9 1 -- -- -- 10
Expenses for
transactions
with
franchisees(2) 15 1 16 78 -- 110
Other operating
costs and
expenses 1 5 168 17 (161) 30
Closures and
impairment
expenses, net 8 3 1 -- -- 12
Other income,
net -- -- -- (1) -- (1)
Restaurant
profit $ 349 $ 73 $ -- $ -- $ -- $ 422
Company sales 2,059 545 9 -- -- 2,613
============== =============== ====================== ====================== ================== ==============
Restaurant
margin 16.9 % 13.3 % (11.5) % N/A N/A 16.1 %
============== =============== ====================== ====================== ================== ==============
Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:
Quarter Ended 6/30/2025
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
GAAP Operating
Profit (Loss) $ 292 $ 46 $ (1) $ (33) $ -- $ 304
Special Items,
Operating
Profit -- -- -- -- -- --
Adjusted
Operating
Profit (Loss) $ 292 $ 46 $ (1) $ (33) $ -- $ 304
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Items Affecting
Comparability -- -- -- -- -- --
F/X impact -- -- -- -- -- --
Core Operating
Profit (Loss) $ 292 $ 46 $ (1) $ (33) $ -- $ 304
============== =============== ====================== ====================== ================== ==============
Year to Date Ended 6/30/2026
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Company sales $ 4,704 $ 1,231 $ 22 $ -- $ -- $ 5,957
Franchise fees
and income 47 6 6 -- -- 59
Revenues from
transactions
with
franchisees(2) 38 5 51 217 -- 311
Other revenues 2 6 483 47 (456) 82
Total revenues $ 4,791 $ 1,248 $ 562 $ 264 $ (456) $ 6,409
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Company
restaurant
expenses 3,852 1,059 25 -- (1) 4,935
General and
administrative
expenses 128 54 14 80 -- 276
Franchise
expenses 21 3 -- -- -- 24
Expenses for
transactions
with
franchisees(2) 30 4 48 216 -- 298
Other operating
costs and
expenses 1 5 474 44 (455) 69
Closures and
impairment
expenses, net 10 1 1 -- -- 12
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Total costs and
expenses, net 4,042 1,126 562 340 (456) 5,614
Operating Profit
(Loss) $ 749 $ 122 $ -- $ (76) $ -- $ 795
============== =============== ====================== ====================== ================== ==============
Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:
Year to Date Ended 6/30/2026
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
GAAP Operating
Profit (Loss) $ 749 $ 122 $ -- $ (76) $ -- $ 795
Less:
Franchise fees
and income 47 6 6 -- -- 59
Revenues from
transactions
with
franchisees(2) 38 5 51 217 -- 311
Other revenues 2 6 483 47 (456) 82
Add:
General and
administrative
expenses 128 54 14 80 -- 276
Franchise
expenses 21 3 -- -- -- 24
Expenses for
transactions
with
franchisees(2) 30 4 48 216 -- 298
Other operating
costs and
expenses 1 5 474 44 (455) 69
Closures and
impairment
expenses, net 10 1 1 -- -- 12
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Restaurant
profit (loss) $ 852 $ 172 $ (3) $ -- $ 1 $ 1,022
Company sales 4,704 1,231 22 -- -- 5,957
============== =============== ====================== ====================== ================== ==============
Restaurant
margin 18.1 % 14.0 % (8.2) % N/A N/A 17.2 %
============== =============== ====================== ====================== ================== ==============
Reconciliation of GAAP Operating Profit to Core Operating Profit is as
follows:
Year to Date Ended 6/30/2026
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
GAAP Operating
Profit (Loss) $ 749 $ 122 $ -- $ (76) $ -- $ 795
Special Items,
Operating
Profit -- -- -- -- -- --
Adjusted
Operating
Profit (Loss) $ 749 $ 122 $ -- $ (76) $ -- $ 795
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Items Affecting
Comparability -- -- -- -- -- --
F/X impact (40) (7) -- 3 -- (44)
Core Operating
Profit (Loss) $ 709 $ 115 $ -- $ (73) $ -- $ 751
============== =============== ====================== ====================== ================== ==============
Year to Date Ended 6/30/2025
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Company sales $ 4,267 $ 1,129 $ 18 $ -- $ -- $ 5,414
Franchise fees
and income 40 4 7 -- -- 51
Revenues from
transactions
with
franchisees(2) 33 3 36 164 -- 236
Other revenues 2 13 342 34 (324) 67
Total revenues $ 4,342 $ 1,149 $ 403 $ 198 $ (324) $ 5,768
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Company
restaurant
expenses 3,481 972 20 -- (1) 4,472
General and
administrative
expenses 120 52 16 81 -- 269
Franchise
expenses 19 2 -- -- -- 21
Expenses for
transactions
with
franchisees(2) 29 3 33 162 -- 227
Other operating
costs and
expenses 2 11 335 34 (323) 59
Closures and
impairment
expenses, net 13 3 2 -- -- 18
Other income,
net -- -- -- (1) -- (1)
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Total costs and
expenses, net 3,664 1,043 406 276 (324) 5,065
Operating Profit
(Loss) $ 678 $ 106 $ (3) $ (78) $ -- $ 703
============== =============== ====================== ====================== ================== ==============
Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:
Year to Date Ended 6/30/2025
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
GAAP Operating
Profit (Loss) $ 678 $ 106 $ (3) $ (78) $ -- $ 703
Less:
Franchise fees
and income 40 4 7 -- -- 51
Revenues from
transactions
with
franchisees(2) 33 3 36 164 -- 236
Other revenues 2 13 342 34 (324) 67
Add:
General and
administrative
expenses 120 52 16 81 -- 269
Franchise
expenses 19 2 -- -- -- 21
Expenses for
transactions
with
franchisees(2) 29 3 33 162 -- 227
Other operating
costs and
expenses 2 11 335 34 (323) 59
Closures and
impairment
expenses, net 13 3 2 -- -- 18
Other income,
net -- -- -- (1) -- (1)
Restaurant
profit (loss) $ 786 $ 157 $ (2) $ -- $ 1 $ 942
Company sales 4,267 1,129 18 -- -- 5,414
============== =============== ====================== ====================== ================== ==============
Restaurant
margin 18.4 % 13.9 % (16.0) % N/A N/A 17.4 %
============== =============== ====================== ====================== ================== ==============
Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:
Year to Date Ended 6/30/2025
-------------------------------------------------------------------------------------------------------------------
Corporate
and
KFC Pizza Hut All Other Segments Unallocated(1) Elimination Total
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
GAAP Operating
Profit (Loss) $ 678 $ 106 $ (3) $ (78) $ -- $ 703
Special Items,
Operating
Profit -- -- -- -- -- --
Adjusted
Operating
Profit (Loss) $ 678 $ 106 $ (3) $ (78) $ -- $ 703
-------------- --------------- ---------------------- ---------------------- ------------------ --------------
Items Affecting
Comparability -- -- -- -- -- --
F/X impact -- -- -- -- -- --
Core Operating
Profit (Loss) $ 678 $ 106 $ (3) $ (78) $ -- $ 703
============== =============== ====================== ====================== ================== ==============
The above tables reconcile segment information, which is based on management
responsibility, with our Condensed Consolidated Statements of Income.
(1) Amounts have not been allocated to any segment for purpose of making
operating decision or assessing financial performance as the transactions are
deemed corporate revenues and expenses in nature.
(2) Primarily includes revenues and associated expenses of transactions with
franchisees derived from the Company's central procurement model whereby the
Company centrally purchases substantially all food and paper products from
suppliers and then sells and delivers to KFC and Pizza Hut restaurants,
including franchisees.
View original content:https://www.prnewswire.com/news-releases/yum-china-reports-second-quarter-2026-results-302838817.html
SOURCE Yum China Holdings, Inc.