Yum China has reported steady Q3 growth, with strong delivery and digital sales helping to offset muted same-store momentum in a cautious consumer market.

For the quarter ended September 30, the operator of KFC, Pizza Hut, and other restaurant brands posted a 4 per cent year-on-year increase in revenue to US$3.2 billion. Operating profit rose 8 per cent to US$400 million, with margins expanding to 12.5 per cent.

System sales grew 4 per cent, supported by 536 net new store openings, while same-store sales inched up 1 per cent. Yum China’s total store count now stands at 17,514, including 12,640 KFC outlets and 4022 Pizza Huts.

Delivery and digital sales on the rise 

Digital channels continued to underpin growth, with digital orders accounting for 95 per cent of total sales. Delivery sales surged 32 per cent year on year, making up 51 per cent of total revenue.

“We delivered another solid quarter in a dynamic market – accelerating store openings, achieving positive same–store sales growth, and expanding margins,” said Joey Wat, CEO of Yum China. 

“Our flexible store formats, together with our franchise strategy, enable faster market entry with lower investment.” 

Brands performance 

KFC remained the company’s main growth driver, recording a 5 per cent rise in system sales and 2 per cent same-store growth. The brand added 402 new stores during the quarter, 41 per cent of which were franchised. Operating profit at KFC climbed 6 per cent to US$384 million, with margins improving to 16 per cent.

Pizza Hut also delivered modest growth, with system sales up 4 per cent and same-store sales rising 1 per cent. It opened 158 new restaurants, lifting operating profit by 7 per cent to US$57 million.

Combined membership across KFC and Pizza Hut grew 13 per cent year on year to 575 million, with member sales making up 57 per cent of total system sales.

Wat also highlighted the rapid expansion of Kcoffee, now with more than 1800 locations, and Kpro, a concept focused on energy bowls and smoothies, which has grown to more than 100 stores in higher-tier cities. 

“By sharing in-store resources and KFC membership programs, we scaled these modules quickly and delivered incremental sales and profit,” Wat added.

Looking ahead, Yum China plans to open 1600 to 1800 new stores this year, with a higher proportion of franchised locations, targeting 40-50 per cent of new KFC stores and 20-30 per cent of new Pizza Huts. The company continues to focus on menu innovation to drive repeat visits.