Key Takeaways
Yum China Holdings, Inc. (NYSE: YUMC, HKEX: 9987) reported first-quarter revenue of $3.3 billion, a 10 percent increase year-over-year, as the company accelerated its expansion with a record number of new store openings.
"We delivered solid results in a dynamic environment, and remain encouraged by early signs of improving consumer sentiment," Joey Wat, CEO of Yum China, said in a statement. "In Q1, we accelerated store openings to a record level to capture significant market opportunities."
The operator of KFC and Pizza Hut in China saw diluted earnings per share grow 13 percent to $0.87. Total system sales grew 4 percent, excluding foreign currency translation, even as same-store sales were flat compared to the prior year. The company noted that same-store transactions grew 2 percent, the 13th consecutive quarter of growth. Delivery sales jumped 31 percent and now account for 54 percent of total company sales.
The strong results come after a mixed market reaction to its previous earnings report. The company confirmed it is on track to return $1.5 billion to shareholders in 2026, representing about 9 percent of its market capitalization. A cash dividend of $0.29 per share was declared.
KFC remains the primary growth engine, reporting a 5 percent increase in system sales and a 1 percent rise in same-store sales. The brand opened 457 net new stores in the quarter, bringing its total to 13,454. Pizza Hut’s system sales grew 4 percent, though same-store sales declined 1 percent. The casual dining brand opened 207 net new stores, expanding its presence to over 100 new cities in the first quarter alone.
Looking ahead, Yum China is targeting more than 1,900 net new stores for the full year, which would bring its total portfolio to over 20,000 restaurants. The company projects capital expenditures between $600 million and $700 million to support this growth.
The first-quarter performance demonstrates a continued focus on expansion and shareholder returns despite a complex consumer environment. Investors will watch closely to see if the rapid pace of store openings and the growing reliance on delivery can sustain momentum toward the company's ambitious full-year targets.
This article is for informational purposes only and does not constitute investment advice.
