Yum China (NYSE:YUMC) Releases Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Yum China (NYSE:YUMC) released its quarterly earnings data on Tuesday. The company reported $0.91 earnings per share for the quarter, topping the consensus estimate of $0.88 by $0.03, Zacks reports. The company had revenue of $3.48 billion for the quarter, compared to analyst estimates of $3.50 billion. Yum China had a net margin of 7.90% and a return on equity of 16.49%. Yum China’s revenue for the quarter was up 8.5% compared to the same quarter last year. During the same period in the previous year, the business earned $0.76 EPS.

Here are the key takeaways from Yum China’s conference call:

• Q3 operating profit rose 13% and diluted EPS increased 20% year over year in reporting currency, while core operating profit grew 6% excluding foreign exchange. Restaurant and operating margins expanded by 50 and 40 basis points, respectively.
• Same-store sales were 97% of the prior-year level, pressured by tough comparisons from delivery subsidies and extreme August weather. Average ticket declined 5% at KFC and 8% at Pizza Hut as the company emphasized value offerings and smaller orders.
• Yum China raised its 2026 net-new-store target to more than 2,400, up from 1,900, with new stores generally achieving a two- to three-year payback. The company is targeting more than 20,500 stores by year-end and remains focused on lower-tier cities and underserved locations.
• The Pizza Hut China brand acquisition is generating licensing savings, contributing about 30 basis points to group margins in Q3 and approximately $0.02 of diluted EPS. Management expects a 50- to 60-basis-point margin benefit in Q4 and sees longer-term growth potential from Burger Bar, new store openings, and retail distribution.
• Management expects Q4 same-store sales to improve sequentially but did not provide a full-year 2026 same-store-sales forecast, citing ongoing volatility. For 2027, it reiterated a target of 0% to 2% same-store sales growth and committed to double-digit EPS growth, supported by efficiency initiatives and capital returns of about $1.5 billion in 2026.

Yum China Stock Performance

YUMC stock traded up $0.22 during midday trading on Thursday, reaching $49.90. 677,711 shares of the company were exchanged, compared to its average volume of 1,609,131. The company has a debt-to-equity ratio of 0.01, a current ratio of 0.96 and a quick ratio of 0.78. The business has a 50-day moving average price of $43.34 and a two-hundred day moving average price of $46.83. Yum China has a one year low of $39.72 and a one year high of $58.39. The firm has a market capitalization of $17.09 billion, a price-to-earnings ratio of 17.34, a price-to-earnings-growth ratio of 1.26 and a beta of 0.06.

Yum China Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 22nd. Shareholders of record on Tuesday, December 1st will be given a dividend of $0.29 per share. This represents a $1.16 dividend on an annualized basis and a yield of 2.3%. The ex-dividend date of this dividend is Tuesday, December 1st. Yum China’s payout ratio is 40.28%.

Wall Street Analysts Forecast Growth

Several equities research analysts recently issued reports on the stock. The Goldman Sachs Group reiterated a “buy” rating and issued a $59.00 target price on shares of Yum China in a research note on Thursday, July 30th. Wall Street Zen downgraded Yum China from a “buy” rating to a “hold” rating in a research report on Saturday, October 10th. Finally, Weiss Ratings raised Yum China from a “hold (c)” rating to a “hold (c+)” rating in a research report on Monday. Three investment analysts have rated the stock with a Buy rating and one has given a Hold rating to the stock. According to data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $59.21.

Insider Activity

In other news, insider Duoduo (Howard) Huang sold 24,096 shares of the firm’s stock in a transaction dated Tuesday, August 18th. The shares were sold at an average price of $47.08, for a total transaction of $1,134,439.68. Following the completion of the sale, the insider owned 7,589 shares in the company, valued at approximately $357,290.12. This trade represents a 76.05% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, insider Jeff Kuai sold 14,586 shares of the firm’s stock in a transaction dated Wednesday, August 12th. The stock was sold at an average price of $47.72, for a total transaction of $696,043.92. Following the sale, the insider owned 63,541 shares of the company’s stock, valued at approximately $3,032,176.52. This represents a 18.67% decrease in their position. The SEC filing for this sale provides additional information. 0.44% of the stock is owned by corporate insiders.

Yum China Company Profile

Yum China Holdings, Inc is a restaurant company focused on operating and developing quick-service and casual-dining brands in China. Headquartered in Shanghai, the company serves customers across mainland China through a large network of company-owned and franchised restaurants, supported by digital ordering, delivery and loyalty platforms.

Its principal brands include KFC, Pizza Hut and Taco Bell, for which Yum China holds the exclusive rights to operate and franchise restaurants in China.