Yum China is accelerating its expansion plans after delivering a strong second quarter, with robust performances from KFC and Pizza Hut.
Revenue rose 13 per cent year on year to US$3.1 billion in the three months ended June 30. Excluding foreign exchange impacts, system sales increased 6 per cent, outperforming China’s broader catering industry, while operating profit reached a second-quarter record of $348 million.
Customer demand also remained resilient, with same-store sales edging up 1 per cent, driven by a 5 per cent increase in transactions, marking the 14th consecutive quarter of transaction growth.
The company opened 560 net new stores during the quarter, 67 per cent more than a year earlier, bringing its total footprint to 19,297 restaurants. Yum China said it remains on track to surpass 20,000 stores by the end of this year.
KFC and Pizza Hut drive momentum
KFC continued to lead growth, opening 335 net new stores to reach 13,789 locations. System sales rose 7 per cent, while same-store sales increased 1 per cent for the fifth consecutive quarter.
Pizza Hut also gained momentum, adding 174 net new stores, nearly double the number opened in the same period last year, as system sales grew 6 per cent and same-store transactions surged 13 per cent.
“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,” said Joey Wat, CEO of Yum China.
“In the near term, we expect the savings in license fees to support margin expansion, with Pizza Hut’s restaurant margin approaching KFC’s.”
New growth engines gather pace
Alongside its core brands, Yum China is scaling a portfolio of newer concepts. Kpro, its light-meal business, is now expected to reach around 800 locations this year, up from an earlier target of 600.
KCoffee Café has expanded to more than 3300 locations, while Pizza Hut’s Burger Bar has grown to more than 200 outlets in just six months, with plans to reach 500 to 600 locations by the end of this year.
Looking ahead, Yum China reaffirmed its 2026 outlook, forecasting high-single-digit operating profit growth and double-digit EPS growth, excluding the impact of its planned acquisition of the Pizza Hut brand in mainland China.
The acquisition, expected to close next month, will give Yum China ownership of the Pizza Hut brand in mainland China after 36 years of operating it under a franchise agreement. The company plans to achieve more than 800 net new store openings annually starting in 2027.
This article was first published on Inside Retail.
