ZACKS·2026-02-05 18:21Core Insights - Yum China Holdings, Inc. (YUMC) reported strong fourth-quarter 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate, showing year-over-year growth in both metrics [1][4] Financial Performance - Adjusted earnings per share for Q4 were 40 cents, surpassing the consensus estimate of 35 cents by 14.3%, and increased 33% year over year [4] - Total revenues reached $2.8 billion, beating the consensus mark of $2.7 billion and growing 8.8% from the previous year [4] - System sales (excluding foreign exchange) rose 7% year over year, with KFC system sales increasing by 8% and Pizza Hut by 6% [5] Operational Highlights - Total costs and expenses were $2.64 billion, up 8% from last year, while the restaurant margin improved by 70 basis points to 13% due to savings in food, paper, and occupancy costs [6] - Adjusted operating profit grew 25% to $187 million, and adjusted EBITDA increased to $318 million from $292 million the previous year [6] Business Segments - KFC's revenues rose 9% to $2.1 billion, with operating profit up 16% to $223 million [7] - Pizza Hut's revenues climbed 6% to $540 million, and operating profit surged 52% to $20 million [7] 2025 Highlights - Total revenues for 2025 were $11.8 billion, compared to $11.3 billion in 2024 [8] - Adjusted EBITDA for 2025 was $1.78 billion, up from $1.69 billion in 2024, and adjusted EPS increased to $2.51 from $2.33 [8] - The company opened 1,706 net new stores, with franchisees accounting for 31% of the openings, bringing the total store count to 18,101 as of December 31, 2025 [8] Shareholder Returns - Yum China returned $1.5 billion to shareholders in 2025, including $1.14 billion in share repurchases and $353 million in cash dividends [11] - The board declared a 21% increase in the cash dividend to $0.29 per share, payable on March 25, 2026 [11] 2026 Outlook - For 2026, Yum China plans to open a total of 20,000 stores, with capital expenditure expected between $600 million and $700 million [12] - The company aims to return $1.5 billion to shareholders in 2026 [12]