Yum China Reports Strong Q4 2025 Performance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4d ago
0mins
Should l Buy YUMC?
Source: Newsfilter
- Same-Store Sales Growth: In Q4 2025, same-store sales increased by 3%, marking the third consecutive quarter of growth, indicating strong performance in market recovery and likely enhancing brand loyalty and market share.
- System Sales Increase: Total system sales grew by 7% year-over-year to $2.8 billion, reflecting the company's success in new store openings and delivery business, which is expected to drive future revenue growth and profitability.
- Significant Operating Profit Increase: Operating profit surged by 25% year-over-year to $187 million in Q4, with core operating profit also rising by 23%, demonstrating substantial progress in cost control and operational efficiency, thereby strengthening overall financial health.
- Shareholder Return Plan: The company plans to return $1.5 billion to shareholders in 2026 and announced a 21% increase in cash dividends, which not only boosts investor confidence but also reflects the company's strong belief in future growth.
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Analyst Views on YUMC
Wall Street analysts forecast YUMC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for YUMC is 56.44 USD with a low forecast of 53.06 USD and a high forecast of 61.58 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
15 Buy
1 Hold
0 Sell
Strong Buy
Current: 55.670
Low
53.06
Averages
56.44
High
61.58
Current: 55.670
Low
53.06
Averages
56.44
High
61.58
About YUMC
Yum China Holdings Inc is a holding company principally engaged in the restaurant operation business. The Company operates three segments, including KFC, Pizza Hut, and All Other segment. KFC segment operates quick-service restaurant, providing original recipe chicken, whole chicken and other chicken products as well as beef burgers, pork, seafood, rice dishes, congees, fresh vegetables, desserts, coffee, tea and many other products. Pizza Hut segment operates casual dining restaurant, offering multiple dayparts, including breakfast, lunch, afternoon tea and dinner. All Other segment includes the operations of Lavazza, Huang Ji Huang, Little Sheep and Taco Bell, delivery operation and e-commerce business.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Store Expansion Success: In 2025, Yum China opened over 1,700 net new stores, bringing the total to over 18,000 across more than 2,500 cities, achieving positive same-store sales growth for three consecutive quarters, indicating strong market demand and brand appeal.
- Financial Performance Improvement: System sales grew 7% year-over-year in Q4, with restaurant margins reaching 13.0%, up 70 basis points, and operating profit at $187 million, a 23% increase year-over-year, reflecting effective strategies in cost control and sales growth.
- Innovation-Driven Growth: Yum China launches about 600 new products annually, with
See More
Yum China (YUMC) Q4 2025 Earnings Call Transcript
See More
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- Surge in Delivery Demand: Delivery sales soared 34% year-over-year, accounting for 53% of total company sales, up from 42% a year earlier, indicating a sustained consumer preference for convenient dining options that enhances revenue streams.
- Accelerated Store Expansion: The company opened 587 net new stores in the quarter, with 36% opened by franchisees, as KFC unlocked new consumption occasions through KCOFFEE and KPRO modules, while Pizza Hut expanded into lower-tier cities, enhancing brand penetration in untapped markets.
- Dividend Increase and Future Outlook: Yum China declared a 21% increase in cash dividends to $0.29 per share and plans to return $1.5 billion annually from 2024 to 2026, with expectations to exceed $1 billion in returns by 2028, demonstrating a strong commitment to shareholder value.
See More
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- Significant Sales Growth: Yum China's total system sales rose 7% year-over-year in Q4, with same-store sales and traffic trends remaining positive, reflecting the strong impact of continued digital engagement and solidifying market position.
- Profit Improvement: Core operating profit increased by 23% year-over-year, with restaurant operating margin up 70 basis points to 13.0%, primarily driven by improvements in food, paper, and occupancy costs, enhancing profitability.
- Earnings Beat Expectations: Non-GAAP EPS of $0.40 exceeded consensus estimates by $0.03 and was above last year's $0.30, indicating improved operational efficiency and strong market demand.
- Future Expansion Plans: Yum China aims to exceed 20,000 stores by 2026 and reach over 30,000 by 2030 using an equity-and-franchise hybrid model, with CEO Joey Wat highlighting efforts to broaden the addressable market through front-end segmentation and back-end consolidation.
See More
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- Dividend Increase: Yum China has declared a quarterly dividend of $0.29 per share, representing a 20.8% increase from the previous $0.24, indicating enhanced profitability and a commitment to shareholder returns.
- Yield Improvement: The forward yield of 2.29% not only attracts more investor interest but also reflects the company's confidence in maintaining stable cash flow and profit growth.
- Payment Schedule: The dividend will be payable on March 25, with a record date of March 4 and an ex-dividend date also on March 4, ensuring timely returns for shareholders and bolstering investor confidence.
- Sustained Growth Trend: Having paid a consistent dividend of $0.24 per share over the past four quarters, this increase signifies Yum China's success in ongoing profitability and cash flow management, further solidifying its competitive position in the market.
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