Abstract
Yum China Holdings, Inc. is scheduled to report on February 04, 2026 Pre-Market; this preview consolidates last quarter’s operating results, current-quarter forecasts, and recent institutional commentary to outline near-term expectations and key drivers shaping the company’s upcoming print.
Market Forecast
For the current quarter, Yum China Holdings, Inc. is projected to deliver revenue of $2.72 billion, representing 3.41% year-over-year growth, with forecast EBIT of $0.17 billion and estimated EPS of $0.36, implying year-over-year increases of 17.75% and 23.13%, respectively. Forecast detail does not include gross profit margin or net margin guidance; however, the last quarter’s reported gross margin was 18.15% and net profit margin was 8.80%, which set a reference point for near-term profitability. The company’s main business is expected to be led by KFC, while Pizza Hut continues to support a balanced mix; KFC’s scale and store expansion underpin transaction growth and digital engagement trends. The most promising segment remains KFC given its substantial revenue base of $2.40 billion last quarter, supported by ongoing net unit growth and menu innovation, while Pizza Hut at $0.64 billion focuses on premium casual dining and targeted promotions to sustain momentum year over year.
Last Quarter Review
In the previous quarter, Yum China Holdings, Inc. reported revenue of $3.21 billion, a gross profit margin of 18.15%, GAAP net profit attributable to the parent company of $0.28 billion with a net profit margin of 8.80%, and adjusted EPS of $0.76, with year-over-year adjusted EPS down by 1.30%. A highlight was operating profit of $0.40 billion, rising 8.00% year over year alongside stable restaurant margins. By business, KFC contributed $2.40 billion and Pizza Hut contributed $0.64 billion, with the company and other segments providing supportive revenues; continued net new unit additions and improved same-store transactions underpinned the mix.
Current Quarter Outlook (with major analytical insights)
Main Business: KFC’s scale and throughput lead the quarter
KFC’s footprint is the primary growth engine this quarter, supported by accelerated store expansion, flexible formats, and franchising where suitable. The forecast revenue base remains anchored by last quarter’s $2.40 billion contribution, and a consistent cadence of product innovation and localized promotions has historically stimulated same-store transactions. Digital ordering penetration and membership engagement are central to traffic resilience, given the high share of online sales and delivery mix in China’s quick-service category. If macro conditions remain steady, KFC’s high-volume throughput and menu price architecture can sustain revenue growth at low- to mid-single-digit rates, with upside from successful promotions and seasonal offerings. The margin implication will hinge on commodity costs—particularly poultry—and operational efficiencies, with last quarter’s 18.15% gross margin a reasonable benchmark if input costs remain contained.
Most Promising Business: KFC’s incremental unit growth and transaction momentum
KFC also represents the most promising near-term driver because it blends unit growth with improving transaction counts. The brand’s ability to open stores in lower-tier cities while maintaining urban productivity has supported a balanced system-sales trajectory. Late-quarter promotional calendars, bundling strategies, and value platforms can add incremental transactions, which, coupled with delivery and digital engagement, may lift sales density without heavy discounting. Given the forecast EPS increase of 23.13% and EBIT growth of 17.75%, throughput gains at KFC and disciplined cost control could translate into leverage on operating expenses. A key watch item is operating timing relative to holidays and weather disruptions; promotional elasticity should support steady volumes even if external conditions are uneven.
Factors Most Impacting the Stock Price This Quarter
Earnings quality and margin cadence will be central to market reaction, as investors compare headline growth with profitability trends against last quarter’s 8.80% net margin baseline. The reported EPS versus consensus—estimated at $0.36—will likely drive the immediate response; any variance attributable to non-operating items such as FX or mark-to-market effects may be scrutinized, given their historical impact on reported EPS volatility. Operational signals around same-store metrics, delivery mix, and digital sales penetration could affect sentiment because these data points inform the sustainability of throughput and pricing power. Finally, store expansion pacing and capital return disclosure, including buybacks and dividends, can influence valuation expectations by contextualizing growth investments with shareholder yield.
Analyst Opinions
The majority of recent institutional commentary has been constructive. Positive views include Buy ratings from Goldman Sachs with a $53.00 price target and Macquarie with a HK$412.00 target, reflecting confidence in revenue resilience and operational execution. Neutral views, such as Oppenheimer’s Hold, underscore watchful positioning on macro inputs and valuation but do not refute the company’s operational progress. The balanced sentiment leans bullish, with supportive references to improved operating profit, steady store expansion, and transaction growth across quarters. Analysts highlight KFC’s ongoing unit additions and menu innovation as key drivers, alongside digital engagement that helps stabilize traffic. The consensus expects a revenue increase for the current quarter, modest EBIT expansion, and EPS growth consistent with forecast, with closer attention to how delivery mix and commodity costs shape margins relative to last quarter’s 18.15% gross margin and 8.80% net margin.
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