Franchising

Yum China sets record for restaurant openings as profits climb

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November 3, 2026 by Valerie Gritton — Editor, Pizza Marketplace

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Yum China is accelerating its restaurant expansion across China, reporting higher revenue and operating profit for the third quarter as it works to capture more dining occasions and maintain growth in a competitive consumer environment.

The operator of KFC, Pizza Hut and several other restaurant brands, reported revenue of $3.5 billion for the quarter, an 8% increase year over year, or 2% excluding foreign currency translation, according to its latest earnings release.

Operating profit increased 13% to $451 million, while diluted earnings per share rose 20% to 91 cents.

Total system-wide sales grew 3%, excluding foreign currency translation. Yum China's same-store sales were down 3% compared with the same quarter last year, reflecting continued pressure on comparable sales. However, same-store transactions increased 3%, marking the company's 15th consecutive quarter of transaction growth.

Yum China CEO Joey Wat attributed the same-store sales pressure partly to difficult comparisons with the prior year, when delivery platform subsidies supported demand, as well as adverse weather in August. The company nevertheless saw growth in smaller orders and solo dining, pointing to opportunities across a broader range of consumer occasions.

"To pursue significant opportunities in China, we accelerated store openings across company-owned and franchise stores, leveraging our tailored store formats and menus and keeping us on track to surpass 20,500 stores this year," Wat said in the release.

Record openings drive expansion strategy

Yum China's development pace reached a new high in the third quarter, with 692 net new restaurants opened — a quarterly record. Franchisees accounted for 44% of those openings.

The company ended September with 19,989 restaurants across China, 19% of which were franchise-operated. It now expects to exceed 20,500 restaurants by year-end.

KFC accounted for the largest share of new development, adding 518 restaurants to 14,307 locations. Pizza Hut opened 191 restaurants, bringing its total to 4,740 restaurants across the region.

Yum China also is building out smaller concepts within its established brands, including KCOFFEE cafes, which surpassed 4,000 locations, and KPRO, which exceeded 700. Pizza Hut's Burger Bar concept crossed 300 locations.

KFC, Pizza Hut focus on transactions and convenience

Both KFC and Pizza Hut continued to generate transaction growth during the quarter, even as same-store sales remained below year-ago levels.

KFC's system-wide sales increased 3%, while same-store sales declined 3% year over year. Transactions increased 2%. The brand's operating profit rose 10% to $425 million, a record third-quarter result.

Pizza Hut's system sales increased 1%, while same-store sales declined 3%. Transactions, however, increased 5%. The brand's operating profit climbed 29% to $73 million, supported in part by operating efficiencies and savings following Yum China's acquisition of the Pizza Hut brand in mainland China.

Convenience is another part of the strategy. KFC's car-side pickup service now covers more than 9,000 locations, giving customers another option for takeaway. Wat said the company is also investing in in-store-only offers and the dine-in experience, while continuing to innovate around core menu items to encourage repeat visits and attract new customers.

Delivery also remains an increasingly significant part of Yum China's business. Delivery sales increased 7% year over year and accounted for 54% of total company sales, up from 51% in the prior-year quarter.

Yum China also announced the addition of Alexander Dimitrief to its board of directors, effective November 4, 2026.

Dimitrief is an experienced corporate executive and attorney who has held senior leadership and legal roles at GE and Sotera Health. He currently leads Dimitrief Advisory LLC, is a partner at Zeughauser Group and serves as an independent director of Eos Energy Enterprises. Previously, he served as GE's general counsel and CEO of its global growth organization, following a 20-year career as a litigator at Kirkland & Ellis. He holds degrees from Yale College and Harvard Law School and has taught corporate law at Harvard and New York Law School.