Yum China Achieves First-Quarter Record Profit of $447M

April 30 — The company that manages the KFC and Pizza Hut fast-food brands in China reported a record first-quarter operating profit of $447 million, with plans to increase its store count by approximately 10% this year.

Operating profit increased by 12% in the three months ending March 31, according to its latest earnings report. Net profit also rose by 6% to $309 million, while total revenue climbed 10% to $3.27 billion.

The company noted that favorable foreign exchange impacts contributed to these results. Its operating profit margin stood at 13.7%, a rise of 0.3 percentage points, marking the eighth consecutive quarter of growth.

It holds exclusive rights to operate and franchise KFC, Pizza Hut, and Taco Bell across mainland China. The company also fully owns the Little Sheep and Huang Jihuang brands and partners with Lavazza to develop and expand Lavazza coffee shop locations within China.

This year, the company aims to operate over 20,000 stores, planning to open more than 1,900 new outlets. It intends to increase the share of franchise stores among new KFC and Pizza Hut locations to between 40% and 50%, with capital expenditures expected to total between $600 million and $700 million.

In the first quarter, the company opened 636 new stores—its highest quarterly total ever—more than double the number from the same period last year. As of March 31, the total store count reached 18,737, with 39% of new stores being franchise outlets.

The company indicated that its investment in Chinese on-demand service platform Meituan negatively impacted earnings by $9 million, contrasting with a positive impact of $2 million in the first quarter of the previous year.

CEO Joey Wat expressed optimism about the future, citing improved consumer sentiment. She explained that the later timing of the Lunar New Year holiday and an additional spring holiday in April influenced dining patterns and same-store sales growth during the quarter. She added that combined performances in March and April are consistent with expectations.

In Hong Kong, the stock closed up by 0.5% at HKD 381, while its New York-listed shares increased by 2.9% yesterday to $48.70.

Takeout sales surged 31% in the first quarter, representing 54% of total restaurant revenue—up from 42% in the same period last year.

Wat noted confidence that the company will meet its full-year earnings targets as competition among delivery platforms becomes more rational.

The company has exclusive operational and licensing rights for KFC, Pizza Hut, and Taco Bell across China and owns Little Sheep and Huang Ji Huang outright. It also collaborates with Lavazza to develop and expand Lavazza coffee shops in the country.