Yum China is doubling down on its aggressive expansion strategy, reporting a record-breaking first quarter for FY26 with 636 net new store openings.

The retail giant posted a 10 per cent rise in total revenue to US$3.3 billion, with operating profit climbing 12 per cent to a record $447 million. Consumer behaviour in China continues to evolve, with delivery now accounting for a staggering 55 per cent of total sales, a significant leap from 43 per cent in the same quarter last year.

“In Q1, we accelerated store openings to a record level to capture significant market opportunities,” said Joey Wat, CEO of Yum China. 

“At the same time, we drove system sales growth, operating profit growth and OP margin expansion for the eighth consecutive quarter, thanks to our teams’ dedication.”

The company’s ‘side-by-side’ store strategy is gaining traction, particularly for the KPRO brand. With 280 units now operational, the healthy-eating concept is being rapidly scaled, with targets to reach 600 locations by the end of the year.

Pizza Hut is similarly undergoing a structural pivot. The ‘Pizza Hut Wow’ format, which focuses on streamlined menus and lower price points, is currently being rolled out across 100 new cities, a move aimed at capturing value-conscious diners in Tier-3 cities and below.

Looking ahead, the company is targeting a total store network of more than 20,000, supported by more than 1900 net new stores this year. Yum China is also eyeing a 40-50 per cent franchise mix for net new stores across both the KFC and Pizza Hut portfolios.

“With our strong foundation, dual focus on innovation and operational efficiency, and a more rational delivery platform competition, we are confident in delivering our full-year targets and creating sustainable long–term value for our shareholders,” Wat added. 

Today’s results follow a solid fourth and final quarter for the company last year.