Yum China Roars Ahead with Record-Setting First Quarter
In a testament to its successful execution of the RGM 3.0 strategy, Yum China delivered solid results in the first quarter of 2026. The company's revenue grew by 10% and operating profit increased by 12%, supported by a positive foreign exchange impact.
Yum China opened an impressive 636 net new stores during the quarter, more than one-third of its full-year target and ahead of schedule. This aggressive expansion strategy was complemented by a dual focus on same-store sales growth and system sales growth. While same-store sales growth was slightly positive – albeit rounded to zero – system sales grew 4% excluding foreign exchange impact.
The company's brands, KFC and Pizza Hut, also performed admirably. KFC remained resilient, with same-store sales growing by 1% for the fourth consecutive quarter. System sales increased by 5%, and restaurant margins remained healthy at 19.1%. Meanwhile, Pizza Hut continued to grow in scale and profitability, delivering an impressive 18% operating profit growth on top of 27% growth in Q1 last year.
"I would like to say a big thank you to our team for delivering solid results in this fast-changing environment," said Joey Wat, CEO of Yum China. "We maintain a strong dual focus on innovation and operational efficiency."
Yum China's commitment to innovation is evident in its various initiatives. During Chinese New Year, the company offered a wide range of options to cater to both group gatherings and solo diners. KFC launched classic Limited-Time Offers (LTOs) such as shrimp burger, beef wrap, and wing bucket to drive additional traffic. The introduction of Crackling Golden Chicken Wings became the first new permanent product on the menu during CNY.
The company's innovative side-by-side modules are also scaling rapidly, delivering meaningful incremental sales and profit. KCOFFEE cafes are now in over 2,600 locations, generating around mid-single-digit sales uplift and requiring far lower investment and operating costs compared to traditional stores. Pizza Hut accelerated expansion with 207 net new stores during the quarter, nearly half of last year's full-year net new openings.
Adrian Ding, CFO of Yum China, will provide more updates on these initiatives and results in further detail later in the call. Overall, Yum China's first-quarter performance is a testament to its ability to adapt and thrive in a dynamic environment."
