Yum China Raises 2026 Expansion Target to More Than 2,400 Net New Stores
Key Facts
Yum China raised its target for net new store openings in 2026 to more than 2,400, aiming to exceed 20,500 stores in total during the year, according to its third-quarter results statement released on November 3. The announcement followed a record 692 net openings in the quarter, bringing its total store count to 19,989 as of September 30. The company said franchisees accounted for 44% of quarterly openings. It also set a franchise mix of 40% to 50% of net new stores for both KFC and Pizza Hut in 2026. The announced expansion target comes as the company accelerates its actual opening pace, with part of the growth relying on franchising.
Third-quarter revenue rose 8% year over year to $3.5 billion, or 2% excluding the impact of currency, while total system sales grew 3% excluding currency translation. But quarterly revenue of $3.48 billion came in below the market estimate of $3.5 billion, despite rising from $3.21 billion in the same period a year earlier. Operating profit rose 13% to $451 million, and the operating margin was 13.0%, up 50 basis points year over year. Diluted earnings per share also increased 20% to $0.91. The restaurant margin was 17.8%, up 50 basis points, supported by operational simplification and favorable commodity costs, which offset pressure from value offers and delivery costs.
At established stores, comparable sales were 97% of the year-earlier level, while comparable transactions rose 3% for the fifteenth consecutive quarter. The chief executive attributed the sales pressure to a difficult comparison with delivery-platform subsidies a year earlier and to bad weather in August. She said the company attracted additional demand through consumption occasions and smaller orders. Meanwhile, delivery’s share of total company sales rose to about 54%, compared with 51% in the year-earlier quarter. KFC or Pizza Hut active members exceeded 278 million, up 6% year over year; an active member is defined as someone who made a transaction in the past twelve months.
The company’s plan combines continued investment in expansion with shareholder returns: it said it was on track to return $1.5 billion annually during 2024–2026. According to the company, that amount represents about 10% of its market capitalization as of October 30, 2026. It returned $362 million to shareholders in the third quarter. In November, the board increased its share repurchase authorization by $1 billion, leaving about $1.3 billion available for future repurchases. The company estimated 2026 capital expenditures at about $600 million to $700 million, alongside its announced franchise-mix target for new KFC and Pizza Hut stores.
The results came as China’s non-manufacturing business activity index registered 49.7% in October, down 0.5 percentage points from September, while the services activity index was 50.0%, according to the National Bureau of Statistics of China. In premarket trading on November 3, the company’s shares fell 4.42% after the announcement, despite adjusted earnings per share of $0.91 beating analysts’ consensus of $0.88 by three cents. In the previous session, the stock closed at $47.08 on November 2, according to EL7 data. The board declared a cash dividend of $0.29 per share, payable on December 22 to shareholders of record on December 1. The National Bureau of Statistics is scheduled to release its next monthly purchasing managers’ index report on November 30, 2026, at 9:30 local time.