#China #Shanghai #Pizza Hut #Yum China #KFC

Yum China's Third Quarter 2025 Financial Performance Report

Yum China Holdings, Inc. has announced its third quarter financial results for 2025, showcasing remarkable growth amidst a dynamic market environment. The company's performance continues to reflect its strong positioning in the competitive fast-food industry in China.

Key Highlights

• - Operating Profit Growth: Yum China recorded an operating profit of $400 million for the third quarter, marking an 8% year-over-year increase. This growth is attributed to improved margins and same-store sales growth.
• - Same-Store Sales Performance: Same-store sales increased by 1%, driven by a 4% growth in same-store transactions, extending the company's streak to eleven consecutive quarters of transaction growth.
• - Total Revenues: The company reported total revenues of $3.2 billion, also a 4% increase from the previous year when foreign currency translation impacts were excluded.
• - Store Expansion: The chain opened a substantial 536 new stores during the quarter, leading to a total store count of 17,514, which includes 12,640 KFC outlets and 4,022 Pizza Hut locations.
• - Shareholder Returns: Yum China remains committed to returning capital to shareholders, anticipating approximately $1.5 billion in total returns for 2025.

Market Strategies

Joey Wat, CEO of Yum China, highlighted the company's strategic focus on operational efficiency and innovation. KFC has seen the fastest store-opening pace this year, while Pizza Hut's expansion is also gaining momentum, passing the significant milestone of 4,000 stores recently. This progress underscores the effectiveness of their dual strategy to foster growth and efficiency across brands.

Product Innovations

Yum China has continued to enhance its product portfolio, especially within KFC, where new offerings like the Crackling Golden Chicken Wings received favorable consumer responses, boosting sales to match those of their flagship New Orleans Roasted Wings. Likewise, Pizza Hut's new hand-crafted thin-crust pizza has become a best-seller, reflecting the effective execution of customer preferences into product development.

Digital Growth

Emphasizing the integration of technology, the company reported that digital sales had reached $2.8 billion, accounting for roughly 95% of total company sales. This shift towards digital ordering has also contributed to a notable 32% year-on-year growth in delivery sales, which now comprise 51% of total sales.

Financial Outlook

Looking ahead, Yum China has set a target of opening between 1,600 to 1,800 net new stores throughout 2025. The anticipated franchise mix aims to reach 40-50% for KFC and 20-30% for Pizza Hut, indicating the company’s ongoing expansion plans.

Joey Wat concluded the discussion of their third-quarter results with a focus on the future, expressing confidence in their established strategies, enhanced operational synergies, and an adaptive market approach. The upcoming investor day on November 17, 2025, is expected to provide further insights into their growth strategy.

Conclusion

In summary, Yum China's third quarter performance in 2025 has illustrated robust growth across various metrics, complemented by strategic store expansions and a strong commitment to shareholder returns. The company's focus on operational innovation and consumer-driven product offerings positions it well for continued success in the fast-food industry in China.