Yum China Holdings, Inc. (YUMC)

Yum China reported second-quarter 2026 revenue of $3.1 billion, up 13 percent from a year earlier, and operating profit of $348 million 1.

Revenue growth excluding currency effects was 6 percent, and same-store sales, which compare restaurants open in both periods, rose 1 percent 1.

Same-store transactions grew 5 percent, the 14th consecutive quarter of growth, while delivery made up about 54 percent of company sales 1.

In August 2026 the company completed its purchase of the Pizza Hut brand in Mainland China for $1.2 billion in cash, financed by a bridge loan of about the same size 2.

Before that, it paid its former parent YUM a license fee of 3 percent of net system sales for Pizza Hut, and that fee ends for the brand 2.

Chief executive Joey Wat said the company expects the savings in license fees to support margin expansion, with Pizza Hut's restaurant margin approaching KFC's 1.

The open question is the second half, which the chief executive said brings tougher comparisons after last year's delivery platform subsidies 1.

Yum China began inside Yum Brands and separated from it on 31 October 2016 2. KFC had been the first major global restaurant brand to enter China, in 1987, and the first Pizza Hut there opened in 1990 32.

In September 2020 it added a second listing in Hong Kong, raising net proceeds of $2.2 billion, and in October 2022 made Hong Kong a primary listing alongside New York 2.

From 2020 to 2022 the COVID-19 pandemic significantly disrupted operations 4. In 2022 revenue fell 3 percent, as 1,159 net new stores were offset by same-store sales declines of 7 percent at KFC and 6 percent at Pizza Hut and temporary closures 5.

Temporary closures peaked at over 4,300 stores in late November 2022 5.

In 2023, as China reopened, revenue rose 15 percent to $10,978 million and operating profit rose 76 percent 4. Net new stores added 9 percent and same-store sales grew 7 percent at KFC 4.

Revenue grew 3 percent in 2024, with net new units adding 7 percent, partly offset by lower same-store sales from a lower ticket average 6.

In 2025 revenue rose 4 percent to $11,797 million and operating profit rose 11 percent to $1,290 million 3. Net new units added 3 percent and same-store sales 1 percent 3.

Profit rose on higher revenue, favorable commodity costs and streamlined operations, partly offset by delivery costs 3. Net income rose 2 percent, held back by a lower fair value of its Meituan investment 3.

In 2024 it raised its planned capital returns from $3.0 billion to $4.5 billion for 2024 to 2026 3.

KFC

KFC is the flagship fast-food brand, with 13,789 restaurants on 30 June 2026 and second-quarter revenue of $2,338 million 1.

KFC system sales grew 7 percent and operating profit rose 14 percent to $332 million, with a restaurant margin of 17.1 percent 1.

KFC's rivals in China are mainly McDonald's, Dicos and Burger King 3. It also sells coffee in KCOFFEE Cafes, which grew from about 50 in 2023 to about 2,200 in 2025, with a target of over 5,000 by 2029 3.

Pizza Hut

Pizza Hut is the casual dining brand, with 4,549 restaurants and second-quarter revenue of $613 million 1.

Its same-store sales returned to growth of 1 percent, with transactions up 13 percent and the average ticket down 11 percent as value offers spread 1.

Pizza Hut mainly competes with Domino's and Papa John's 3.

Other brands and delivery

Huang Ji Huang had 627 units and Little Sheep 135 at the end of 2025, both mainly franchised 3. Lavazza had 146 coffee shops and Taco Bell 28 restaurants on that date 3.

Delivery sales grew 26 percent in the quarter and made up about 54 percent of company sales 1.

Plants, people and problems

It used 34 logistics centers to supply company and franchised stores 3. At the end of 2025 it had 15,060 company-owned units, of which 14,998 were leased and 62 owned 3.

It had about 290,000 employees, including about 130,000 full-time staff and 160,000 part-time crew 3. Joey Wat has been chief executive since March 2018 3.

The Chinese restaurant industry had sales of about RMB 5,756 billion in 2025, up 3 percent, and the company says it has the largest share by system sales 3.

The annual report warns that delivery platform promotions and fee changes, and tax audits including transfer pricing, could affect results 3.

In August 2026 it agreed an amended license with YUM, which also sets a framework to develop a long-term growth plan for Taco Bell China 2.

The umbrella, in words

The brands are KFC, Pizza Hut, Lavazza, Huang Ji Huang, Little Sheep and Taco Bell 2. The company agreed to license KFC and Taco Bell from YUM for 3 percent of net system sales, and it owns the Little Sheep and Huang Ji Huang brands 2.

The subsidiaries exhibit lists Beijing KFC Co., Ltd., Hangzhou KFC Co., Ltd. and Inner Mongolia Little Sheep Catering Chain Co., Ltd. among many others 7.

It owns about 60 percent of Hangzhou KFC and 65 percent of the Lavazza joint venture 2.

It owns 5 percent of Fujian Sunner Development, China's largest white-feathered chicken producer and its largest poultry supplier, and has one seat on its board 3.

It invested in shares of Meituan in September 2018, carried at fair value 3.

Among the large holders, JPMorgan Chase reported 5.7 percent of the common stock in its latest Schedule 13G amendment 8.

At the separation, Pollos Investment L.P., an affiliate of Primavera Capital Group, acquired approximately 16 million shares, and a shareholders agreement was signed on 1 November 2016 3.

For 2026 the company targets total stores of over 20,000, or more than 1,900 net new stores 1. It also targets a 40-50 percent franchise share of net new stores and capital spending of about $600 million to $700 million 1.

The annual report states a target of over 30,000 stores by 2030, and cafe targets of over 5,000 KCOFFEE units and 1,000 Lavazza stores by 2029 3.

The company is on track to return $1.5 billion to shareholders in 2026 1. From 2027 it plans to return about 100 percent of annual free cash flow after dividends to minority holders in subsidiaries 1.

It said this should mean an average of about $900 million to over $1 billion a year in 2027 and 2028 1.

The board declared a dividend of $0.29 per share, payable on 17 September 2026 1.

Under the amended KFC license, the company can earn annual financial incentives from YUM over the next twelve years if KFC China meets system sales growth targets 2.