Yum China Holdings, Inc. Q4 FY2025 earnings call

Opened over 1,700 net new stores in 2025, total stores over 18,000. Same-store sales positive for three consecutive quarters, system sales grew 7% in Q4. OP margin 10.9% full year. Innovation with new menu items, AI initiatives (Q Smart, SmartK), franchise expansion, RGM 3.0 strategy focusing on resilience, growth, moats

KFC: In 2025, opened 1,349 new stores, total near 13,000; system sales grew 5%, restaurant margins expanded 50 basis points to 17.4%; same-store sales grew 3% in Q4. Pizza Hut: Opened 444 net new stores in 2025, total 4,168; system sales grew 6% in Q4, same-store sales grew 1%; restaurant margins improved 80 basis points to 12.8%. Emerging brands like Lavazza opened 34 net new stores, same-store sales positive in 2025, packaged coffee retail business grew over 40%

2026 outlook: Expect to reach over 20,000 stores, open over 1,900 net new stores, 40%-50% from franchisees. CapEx $600-700M. Mid to high single-digit system sales growth, high single-digit operating profit growth, double-digit EPS growth. Q1 margins face challenges from rider costs, smaller commodity price benefits, tough base comparison

Delivery mix increase leading to higher rider costs, smaller benefit from lower commodity prices, tough year-over-year margin comparison in Q1 due to high prior year bases

Q: Questions on pricing, delivery mix, SSG in Q4, Gemini stores, K Pro, delivery strategy, etc.

A: Responses from Joey Wat and Adrian Ding addressing each question, including details on pricing adjustments, delivery mix outlook, Gemini store plans, K Pro economics, and delivery platform impact