Yum China (YUMC) Q2 2026 earnings summary

Executive summary

• Achieved ninth consecutive quarter of system sales, operating profit, and margin growth, with record Q2 operating profit of $348 million, up 14% year-over-year.

• Revenue grew 13% year-over-year to $3.14 billion, with diluted EPS up 21% to $0.70.

• Opened 560 net new stores in Q2, with accelerated expansion in both equity and franchise formats; 41% of new stores opened by franchisees.

• Delivery sales grew 26% year-over-year, now representing 54% of total sales, supporting top-line growth while maintaining margins.

• Acquisition of the Pizza Hut brand in Mainland China expected to close in August 2026, anticipated to support margin expansion and be accretive to EPS from 2026 onward.

Financial highlights

• Q2 revenue rose 13% year-over-year to $3.14 billion; system sales up 6% year-over-year; same-store sales up 1% year-over-year.

• Operating profit reached $348 million, up 14% year-over-year; core operating profit up 7% year-over-year.

• OP margin expanded by 20 basis points year-over-year to 11.1%; restaurant margin steady at 16.1%.

• Diluted EPS was $0.70, up 21% year-over-year, or 10% excluding Meituan investment impact.

• Adjusted EBITDA for the quarter was $482 million, up from $427 million a year ago.

Outlook and guidance

• Confident in meeting 2026 targets: mid- to high-single-digit system sales growth, high-single-digit operating profit growth, double-digit EPS growth, and slight margin improvement.

• Targeting over 20,000 total stores by year-end 2026, with more than 1,900 net new stores.

• Plans to return $1.5 billion to shareholders in 2026 and approximately 100% of annual free cash flow starting in 2027.

• Pizza Hut brand acquisition in Mainland China expected to close August 2026, immediately accretive to EPS.

• Capital expenditures projected at $600–$700 million for 2026.