Yum China Holdings, Inc. (NYSE:YUMC) posted stronger-than-expected second-quarter results on Thursday, with earnings and revenue both beating Wall Street forecasts as the restaurant operator continued to outperform the broader dining market in China.
The upbeat report lifted the company’s shares 2.14% in premarket trading.
Revenue and Earnings Beat Analyst Forecasts
Yum China reported adjusted earnings of $0.70 per share for the quarter, exceeding analysts’ expectations of $0.67.
Revenue increased 13% year over year to $3.14 billion, up from $2.79 billion in the same period last year and ahead of the consensus estimate of $3.05 billion.
Same-store sales rose 1% compared with a year earlier, marking the fifth straight quarter of growth for KFC, while Pizza Hut returned to positive comparable sales growth.
Profitability Continues to Improve
Operating profit climbed 14% from the prior year to $348 million.
The company’s operating margin expanded by 20 basis points to 11.1%, extending its streak of year-over-year margin improvement to nine consecutive quarters.
“We delivered strong results in the second quarter. For the ninth consecutive quarter, we simultaneously grew system sales, operating profit and OP margin,” said Joey Wat, CEO of Yum China. “While the operating environment remains dynamic, our topline growth continued to outperform the industry in Q2.”
Expansion Plans Remain on Track
KFC recorded 7% year-over-year growth in system sales, while restaurant margin improved to 17.1%.
Pizza Hut also returned to positive same-store sales growth of 1%, and the brand nearly doubled its net new restaurant openings compared with the same period last year.
During the quarter, Yum China opened 560 net new restaurants, representing a second-quarter record and a 67% increase from a year earlier.
The company expects to open more than 1,900 net new stores during 2026, which would take its total store count beyond 20,000 locations.
Yum China also reaffirmed that it remains on track to return $1.5 billion to shareholders during 2026. In addition, the acquisition of the Pizza Hut brand in Mainland China is expected to be completed in August 2026.