Yum China Holdings (YUMC)·Q4 2025 Earnings Summary
Yum China Beats Q4 on Strong Delivery Growth, Raises Dividend 21%
February 4, 2026 · by Fintool AI Agent
Yum China (NYSE: YUMC) reported Q4 2025 results that exceeded Wall Street expectations on both revenue and earnings, driven by a record quarter for store openings and accelerating delivery sales. The stock rose ~4% in aftermarket trading as the company announced a 21% dividend increase and reaffirmed $1.5B in planned shareholder returns for 2026.
Did Yum China Beat Earnings?
Yes — double beat on revenue and EPS.
Yum China delivered its strongest Q4 in recent memory:
- Revenue increased 9% YoY (7% ex-F/X) to $2.82B
- Diluted EPS rose 33% YoY to $0.40 (29% ex-F/X)
- Same-store sales grew 3% — the 12th consecutive quarter of transaction growth
- Operating profit jumped 25% YoY to $187M with OP margin expanding 80 bps to 6.6%
Ask Fintool AI AgentWhat Changed From Last Quarter?
The Q4 print showed material acceleration from Q3 2025:
The delivery story is the headline. Delivery sales grew 34% YoY and now represent 53% of total Company sales, up from 42% a year ago. This is a structural shift in how Chinese consumers engage with KFC and Pizza Hut.
How Did Each Segment Perform?
KFC — The Engine
KFC remains the dominant growth driver, delivering another strong quarter:
KFC's margin expansion was driven by favorable commodity prices and streamlined operations, partially offset by increased delivery rider costs.
Pizza Hut — The Turnaround
Pizza Hut posted a record Q4 operating profit of $20M (+52% YoY):
The WOW store model is unlocking new locations in lower-tier cities, and the value-for-money strategy is driving transaction growth even as ticket average declined 11% YoY.
Ask Fintool AI AgentWhat Did Management Guide?
2026 Outlook:
Long-term vision: Management reiterated the target of 30,000+ stores by 2030 with an equity-and-franchise hybrid model.
Starting 2027: The Company plans to return approximately 100% of annual free cash flow to shareholders, translating to $900M-$1B+ annually.
Capital Returns — The Real Story
Yum China's shareholder return program is among the most aggressive in the restaurant sector:
Key announcements:
- Dividend raised 21% to $0.29/share quarterly (payable March 25, 2026)
- Share repurchase of ~$460M authorized for H1 2026 via Rule 10b5-1 programs
- In 2025, the company repurchased 24.7M shares (~7% of shares outstanding)
How Did the Stock React?
The aftermarket move puts YUMC within 2% of its 52-week high, reflecting investor enthusiasm for the beat and dividend increase.
CEO Commentary
Joey Wat, CEO of Yum China:
"Our fourth quarter performance capped off 2025 on a high note. Thanks to our team's hard work, we delivered same-store sales growth for three consecutive quarters and same-store transactions growth for twelve consecutive quarters."
On expansion strategy:
"Looking ahead, we are on track to reach over 20,000 stores in 2026 and are targeting more than 30,000 stores by 2030 with an equity-and-franchise hybrid model. We are also broadening our addressable market through front-end segmentation and back-end consolidation."
Management highlighted KFC's KCOFFEE cafe and KPRO side-by-side modules as new consumption occasions driving growth.
Full Year 2025 Summary
Q&A Highlights
On delivery pricing: KFC implemented a mild price increase affecting only the delivery menu, with no changes to dine-in, takeaway, or signature campaigns like Crazy Thursday. The adjustment helps absorb rising rider costs.
On module expansion: K Coffee Cafe tripled its footprint from 700 to 2,200 locations in 2025, with per-store daily cup sales up 25% YoY. K Pro reached 200+ locations and targets 400+ by 2026, delivering double-digit incremental sales to parent KFC stores.
On Pizza Hut innovation: The new Handcrafted Thin Crust pizza now accounts for 1 in 3 pizzas sold. Burgers reached mid-single-digit of sales mix, and single-person meals grew 50% YoY.
On the Gemini model: KFC and Pizza Hut side-by-side stores cost CNY 0.7-0.8M per pair, share staff and equipment, and target lower-tier cities. About 40 pairs opened in 2025 with ramp-up planned for 2026.
On Q1 2026 outlook: Management guided restaurant margin and OP margin roughly flat YoY in Q1 due to tough comps (KFC hit 19.8% restaurant margin in Q1 2025, Pizza Hut margin improved 190 bps YoY). Full-year margins expected to improve slightly.
On dine-in vs delivery: Dine-in remains ~30% at KFC and ~45% at Pizza Hut. Management is investing in car-side pickup at 4,000+ KFC stores as a growing channel. Takeaway nearly doubled since 2019.
Chinese New Year Trading Update
Chinese New Year falls on February 17, considerably later than most years. Year-to-date trading has been in line with expectations as traffic ramps toward peak trading days.
Key initiatives:
- KFC launching signature buckets plus new peanut and sunflower seed mini buckets for festive occasions
- Pizza Hut focusing on Super Supreme Pizza with new bolognese and salted egg yolk toppings
Management remains confident in delivering a fourth consecutive quarter of positive same-store sales growth and 13th consecutive quarter of transaction growth.
Key Risks & Watchpoints
- Delivery cost pressure — Rider costs are rising with higher delivery mix, partially offsetting margin gains
- Q1 tough comps — Both KFC and Pizza Hut face high margin base from Q1 2025; margins expected flat YoY
- Value-for-money strategy — Lower ticket averages could pressure margins if commodity costs rise
- China macro — Consumer spending trends remain uncertain; same-store sales growth is still modest at +1-3%
- Delivery platform subsidy dynamics — Management has multiple scenario plans but believes impact will be limited
Forward Estimates
Analyst consensus for upcoming quarters:*
*Values retrieved from S&P Global.
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