The restaurant giant reported a 9.0% increase in fourth-quarter revenue, reaching US$2.8 billion. This performance was bolstered by a 3% rise in same-store sales—marking the third consecutive quarter of growth—and a significant 34% jump in delivery sales. According to the company’s financial disclosure, delivery now accounts for more than half of its total revenue, underscoring a shift in consumer behavior within the Chinese market.

Chief Executive Joey Wat confirmed that the company remains on track to reach 20,000 stores by 2026, with a longer-term goal of 30,000 locations by 2030. This expansion relies on a hybrid model of equity-owned and franchised outlets, specifically targeting lower-tier cities where brand penetration offers the highest growth potential.

Expansion Strategy and Market Resilience

Analysts at Deutsche Bank and Nomura expressed optimism regarding the company's trajectory, citing early signs of a consumption recovery in China. Deutsche Bank analyst Han Zhang raised earnings projections through 2028, noting that Yum China’s margins improved despite broader economic headwinds. The report highlighted several key performance metrics:

• Same-store sales grew for the third consecutive quarter.
• Operating profit margins expanded by 80 basis points.
• Restaurant margins increased by 70 basis points year-over-year.

Despite the positive momentum, some analysts remain cautious about long-term overhead. Nomura’s Jizhou Dong suggested that while product innovation at KFC and Pizza Hut will likely sustain sales, rising labor costs could pressure earnings over the next two years. Consequently, Nomura adjusted its 2026-2027 profit forecasts downward by up to 9% to account for these potential macroeconomic shifts.