Yum China Reports Second Quarter 2025 Results

Yum China Holdings, Inc.

Segment Results

(in US$ million)

(unaudited)

Quarter Ended 6/30/2025

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

Company sales

$         2,059

$            545

$                       9

$                     —

$                  —

$         2,613

Franchise fees and income

19

2

3

—

—

24

Revenues from transactions with franchisees⁽²⁾

17

1

17

80

—

115

Other revenues

1

6

172

17

(161)

35

Total revenues

$         2,096

$            554

$                   201

$                     97

$              (161)

$         2,787

Company restaurant expenses

1,710

472

9

—

—

2,191

General and administrative expenses

61

26

8

36

—

131

Franchise expenses

9

1

—

—

—

10

Expenses for transactions with franchisees⁽²⁾

15

1

16

78

—

110

Other operating costs and expenses

1

5

168

17

(161)

30

Closures and impairment expenses, net

8

3

1

—

—

12

Other income, net

—

—

—

(1)

—

(1)

Total costs and expenses, net

1,804

508

202

130

(161)

2,483

Operating Profit (Loss)

$            292

$              46

$                     (1)

$                   (33)

$                  —

$            304

Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:

Quarter Ended 6/30/2025

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

GAAP Operating Profit (Loss)

$            292

$              46

$                     (1)

$                   (33)

$                  —

$            304

Less:

Franchise fees and income

19

2

3

—

—

24

Revenues from transactions with franchisees⁽²⁾

17

1

17

80

—

115

Other revenues

1

6

172

17

(161)

35

Add:

General and administrative expenses

61

26

8

36

—

131

Franchise expenses

9

1

—

—

—

10

Expenses for transactions with franchisees⁽²⁾

15

1

16

78

—

110

Other operating costs and expenses

1

5

168

17

(161)

30

Closures and impairment expenses, net

8

3

1

—

—

12

Other income, net

—

—

—

(1)

—

(1)

Restaurant profit

$            349

$              73

$                     —

$                     —

$                  —

$            422

Company sales

2,059

545

9

—

—

2,613

Restaurant margin

16.9 %

13.3 %

(11.5) %

N/A

N/A

16.1 %

Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:

Quarter Ended 6/30/2025

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

GAAP Operating Profit (Loss)

$            292

$              46

$                     (1)

$                   (33)

$                  —

$            304

Special Items, Operating Profit 

—

—

—

—

—

—

Adjusted Operating Profit (Loss)

$            292

$              46

$                     (1)

$                   (33)

$                  —

$            304

Items Affecting Comparability

—

—

—

—

—

—

F/X impact

(1)

—

—

—

—

(1)

Core Operating Profit (Loss)

$            291

$              46

$                     (1)

$                   (33)

$                  —

$            303

Quarter Ended 6/30/2024

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

Company sales

$         1,983

$            530

$                     15

$                     —

$                  —

$         2,528

Franchise fees and income

16

2

4

—

—

22

Revenues from transactions with franchisees⁽²⁾

12

1

16

67

—

96

Other revenues

3

7

144

16

(137)

33

Total revenues

$         2,014

$            540

$                   179

$                     83

$              (137)

$         2,679

Company restaurant expenses

1,663

460

14

—

—

2,137

General and administrative expenses

60

27

10

36

—

133

Franchise expenses

8

1

—

—

—

9

Expenses for transactions with franchisees⁽²⁾

11

1

14

66

—

92

Other operating costs and expenses

2

6

142

16

(137)

29

Closures and impairment expenses, net

6

5

2

—

—

13

Total costs and expenses, net

1,750

500

182

118

(137)

2,413

Operating Profit (Loss)

$            264

$              40

$                     (3)

$                   (35)

$                  —

$            266

Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:

Quarter Ended 6/30/2024

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

GAAP Operating Profit (Loss)

$            264

$              40

$                     (3)

$                   (35)

$                  —

$            266

Less:

Franchise fees and income

16

2

4

—

—

22

Revenues from transactions with franchisees⁽²⁾

12

1

16

67

—

96

Other revenues

3

7

144

16

(137)

33

Add:

General and administrative expenses

60

27

10

36

—

133

Franchise expenses

8

1

—

—

—

9

Expenses for transactions with franchisees⁽²⁾

11

1

14

66

—

92

Other operating costs and expenses

2

6

142

16

(137)

29

Closures and impairment expenses, net

6

5

2

—

—

13

Restaurant profit

$            320

$              70

$                       1

$                     —

$                  —

$            391

Company sales

1,983

530

15

—

—

2,528

Restaurant margin

16.2 %

13.2 %

5.9 %

N/A

N/A

15.5 %

Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:

Quarter Ended 6/30/2024

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

GAAP Operating Profit (Loss)

$            264

$              40

$                     (3)

$                   (35)

$                  —

$            266

Special Items, Operating Profit 

—

—

—

—

—

—

Adjusted Operating Profit (Loss)

$            264

$              40

$                     (3)

$                   (35)

$                  —

$            266

Items Affecting Comparability

—

—

—

—

—

—

F/X impact

—

—

—

—

—

—

Core Operating Profit (Loss)

$            264

$              40

$                     (3)

$                   (35)

$                  —

$            266

Year to Date Ended 6/30/2025

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

Company sales

$         4,267

$         1,129

$                     18

$                     —

$                  —

$         5,414

Franchise fees and income

40

4

7

—

—

51

Revenues from transactions with franchisees⁽²⁾

33

3

36

164

—

236

Other revenues

2

13

342

34

(324)

67

Total revenues

$         4,342

$         1,149

$                   403

$                   198

$              (324)

$         5,768

Company restaurant expenses

3,481

972

20

—

(1)

4,472

General and administrative expenses

120

52

16

81

—

269

Franchise expenses

19

2

—

—

—

21

Expenses for transactions with franchisees⁽²⁾

29

3

33

162

—

227

Other operating costs and expenses

2

11

335

34

(323)

59

Closures and impairment expenses, net

13

3

2

—

—

18

Other income, net

—

—

—

(1)

—

(1)

Total costs and expenses, net

3,664

1,043

406

276

(324)

5,065

Operating Profit (Loss)

$            678

$            106

$                     (3)

$                   (78)

$                  —

$            703

Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:

Year to Date Ended 6/30/2025

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

GAAP Operating Profit (Loss)

$            678

$            106

$                     (3)

$                   (78)

$                  —

$            703

Less:

Franchise fees and income

40

4

7

—

—

51

Revenues from transactions with franchisees⁽²⁾

33

3

36

164

—

236

Other revenues

2

13

342

34

(324)

67

Add:

General and administrative expenses

120

52

16

81

—

269

Franchise expenses

19

2

—

—

—

21

Expenses for transactions with franchisees⁽²⁾

29

3

33

162

—

227

Other operating costs and expenses

2

11

335

34

(323)

59

Closures and impairment expenses, net

13

3

2

—

—

18

Other income, net

—

—

—

(1)

—

(1)

Restaurant profit (loss)

$            786

$            157

$                     (2)

$                     —

$                    1

$            942

Company sales

4,267

1,129

18

—

—

5,414

Restaurant margin

18.4 %

13.9 %

(16.0) %

N/A

N/A

17.4 %

Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:

Year to Date Ended 6/30/2025

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

GAAP Operating Profit (Loss)

$            678

$            106

$                     (3)

$                   (78)

$                  —

$            703

Special Items, Operating Profit 

—

—

—

—

—

—

Adjusted Operating Profit (Loss)

$            678

$            106

$                     (3)

$                   (78)

$                  —

$            703

Items Affecting Comparability

—

—

—

—

—

—

F/X impact

4

1

—

—

—

5

Core Operating Profit (Loss)

$            682

$            107

$                     (3)

$                   (78)

$                  —

$            708

Year to Date Ended 6/30/2024

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

Company sales

$         4,176

$         1,117

$                     29

$                     —

$                  —

$         5,322

Franchise fees and income

34

4

9

—

—

47

Revenues from transactions with franchisees⁽²⁾

26

2

36

139

—

203

Other revenues

8

12

308

31

(294)

65

Total revenues

$         4,244

$         1,135

$                   382

$                   170

$              (294)

$         5,637

Company restaurant expenses

3,434

974

31

—

(1)

4,438

General and administrative expenses

121

54

20

78

—

273

Franchise expenses

17

2

—

—

—

19

Expenses for transactions with franchisees⁽²⁾

23

2

33

138

—

196

Other operating costs and expenses

6

11

304

30

(293)

58

Closures and impairment expenses, net

7

5

2

—

—

14

Other income, net

—

—

—

(1)

—

(1)

Total costs and expenses, net

3,608

1,048

390

245

(294)

4,997

Operating Profit (Loss)

$            636

$              87

$                     (8)

$                   (75)

$                  —

$            640

Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:

Year to Date Ended 6/30/2024

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

GAAP Operating Profit (Loss)

$            636

$              87

$                     (8)

$                   (75)

$                  —

$            640

Less:

Franchise fees and income

34

4

9

—

—

47

Revenues from transactions with franchisees⁽²⁾

26

2

36

139

—

203

Other revenues

8

12

308

31

(294)

65

Add:

General and administrative expenses

121

54

20

78

—

273

Franchise expenses

17

2

—

—

—

19

Expenses for transactions with franchisees⁽²⁾

23

2

33

138

—

196

Other operating costs and expenses

6

11

304

30

(293)

58

Closures and impairment expenses, net

7

5

2

—

—

14

Other income, net

—

—

—

(1)

—

(1)

Restaurant profit (loss)

$            742

$            143

$                     (2)

$                     —

$                    1

$            884

Company sales

4,176

1,117

29

—

—

5,322

Restaurant margin

17.8 %

12.8 %

(11.1) %

N/A

N/A

16.6 %

Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:

Year to Date Ended 6/30/2024

KFC

Pizza Hut

All Other
Segments

Corporate
and
Unallocated⁽¹⁾

Elimination

Total

GAAP Operating Profit (Loss)

$            636

$              87

$                     (8)

$                   (75)

$                  —

$            640

Special Items, Operating Profit 

—

—

—

—

—

—

Adjusted Operating Profit (Loss)

$            636

$              87

$                     (8)

$                   (75)

$                  —

$            640

Items Affecting Comparability

—

—

—

—

—

—

F/X impact

—

—

—

—

—

—

Core Operating Profit (Loss)

$            636

$              87

$                     (8)

$                   (75)

$                  —

$            640

The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated Statements of Income.  

(1) Amounts have not been allocated to any segment for purpose of making operating decision or assessing financial performance as the transactions are deemed corporate revenues
and expenses in nature.

(2) Primarily includes revenues and associated expenses of transactions with franchisees derived from the Company’s central procurement model whereby the Company centrally purchases
substantially all food and paper products from suppliers and then sells and delivers to KFC and Pizza Hut restaurants, including franchisees.