While many restaurants were still struggling in China’s slowing economy, Yum China just posted its strongest couple of quarters operating profit ever at $304 million, a 14 percent jump from last year that pushed its profit margin up a full percentage point to nearly 11 percent.
The company’s Q2 achievements include total revenue rising 4 percent to $2.8 billion and same-store sales edging up 1 percent, powered by a 2 percent lift in customer visits for the tenth straight quarter. Management aims to open another 1,600 to 1,800 net new stores in 2025, keeping the expansion engine at full throttle. shareholder returns With management confirming plans to return a total of $3 billion to shareholders by 2026, investor confidence remains high alongside the operating surge. Alongside these developments, the global coffee culture continues to influence evolving dining experiences, as consumers increasingly embrace coffee alongside traditional meals, drawing inspiration from the third wave coffee movement that emphasizes quality and unique flavors.
Driving much of the momentum is the KCoffee expansion wave. KCoffee, KFC’s in-house coffee line, has become a hook for new diners and raised how much each guest spends. New drinks roll out quickly to match the country’s sharp growth in daily coffee drinking, especially in big cities. Coffee cups sit beside buckets of chicken in more than 12,000 KFC stores now open across China, and the pairing keeps drawing morning and afternoon foot traffic that once belonged to specialty cafés.
Store expansion kept pace. Yum China added a net 336 restaurants in the quarter and ended June with 16,978 locations. Franchisees funded 89 of these openings, or just over one in four new stores. Pizza Hut pushed its network to 3,864 outlets, but KFC remains the engine, offering KCoffee alongside fried chicken to widen appeal and gather beverage market share.
Delivery is almost half the story now. Forty-five percent of Yum China’s sales arrived by courier this quarter versus 38 percent a year ago. Digital ordering screens and routing tweaks trimmed some costs, yet higher rider fees still squeeze the margin.
The firm raised delivery prices carefully so sales keep growing without hurting profit. Diluted earnings per share rose 5 percent as reported and jumped 15 percent after setting aside currency swings, a sign the core business is solid even as competitors cut prices tight.
Management’s blend of new stores, coffee innovation, and smarter delivery sets Yum China firmly ahead in China’s crowded fast-food race as it heads toward the latter half of the year.
