Yum China Same-Store Sales Turn Negative After Second-Quarter Gain

The Tip Desk · November 3, 2026 · 3 min read

Third-quarter revenue rose 8% to $3.5 billion as operating profit reached $451 million and the company opened a record 692 net new stores.

Yum China Holdings (YUMC), the largest restaurant company in China, reported third-quarter revenue of $3.5 billion, up 8% from a year earlier, or 2% excluding foreign-currency translation, after a 13% year-over-year increase in the second quarter.

Same-store sales reached 97% of the prior year’s level, a 3% decline that reversed the 1% year-over-year same-store sales growth recorded in the second quarter. Same-store transactions still grew 3%, the 15th consecutive quarter of growth, though that pace slowed from 5% in the prior quarter.

Chief executive Joey Wat said same-store sales faced pressure from tough comparisons against last year’s delivery platform subsidies and adverse weather in August. The company said it captured incremental demand across smaller orders and solo dining.

Operating profit grew 13% year over year to $451 million. Operating-margin expansion continued for a 10th consecutive quarter, with the margin at 13.0%, up 50 basis points from a year earlier. Restaurant margin was 17.8%, also up 50 basis points, after being 16.1% and flat year over year in the second quarter. The company attributed the restaurant-margin lift to streamlined operations and favorable commodity prices, which more than offset value-for-money offerings, sales deleveraging and higher rider costs from a larger delivery mix. Pizza Hut license-fee savings also contributed.

Diluted earnings were $0.91 a share, up 20% year over year, or 12% excluding foreign exchange.

The company opened 692 net new stores, a quarterly record, with 44% opened by franchisees. Total store count reached 19,989 as of September 30, 2026. After record openings in the first nine months, Yum China raised its 2026 full-year net-new-store target to more than 2,400 and said it is on track to surpass 20,500 stores this year.

Delivery sales grew 7% year over year, down from 26% growth in the second quarter. Delivery still contributed about 54% of total company sales, unchanged from the prior quarter.

KFC, the quick-service brand, posted total revenues of $2.60 billion, up 8% year over year, or 2% excluding foreign exchange. KFC operating profit rose 10% to $425 million, a record third-quarter level, with operating margin at 16.3% and restaurant margin at 18.6%. KFC same-store sales also reached 97% of the year-ago level; same-store transactions grew 3% and ticket average was 5% lower. The brand opened 518 net new stores, including 269 by franchisees, bringing KFC’s count to 14,307.

Pizza Hut total revenues were $665 million, up 5% year over year, or a 1% decline excluding foreign exchange. Operating profit rose 29% to $73 million. Operating margin expanded 210 basis points to 11.0% and restaurant margin expanded 190 basis points to 15.3%, supported by license-fee savings after the company completed the acquisition of the Pizza Hut brand in Mainland China on August 7, 2026. Pizza Hut same-store sales also reached 97% of the year-ago level; same-store transactions grew 5%. The brand opened 191 net new stores, including 91 by franchisees, bringing its count to 4,740.

The board increased the share-repurchase authorization by $1 billion in November 2026, leaving about $1.3 billion available, and declared a cash dividend of $0.29 a share payable December 22, 2026. Yum China said it is on track to return $1.5 billion to shareholders in 2026. Starting in 2027, it plans to return approximately 100% of annual free cash flow after subsidiaries’ dividend payments to non-controlling interests.