Yum China Holdings, Inc.
For the period ended Sep 30, 2025. Filed Nov 10, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 10, 2025
YUMC$49.95+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0000950170-25-106199
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001193125-25-273109
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 132 current paragraphs.
105 unchanged; 22 reworded; 5 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 27 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Operating profit for the third quarter increased 8%, including or excluding the impact of F/X. The increase in Operating profit for the quarter ended September 30, 2025 was primarily driven by the increase in Total revenues, efficiency improvement from streamlined operations and favorable commodity prices, partially offset by increased delivery cost associated with higher delivery sales mix in the current period and increased value-for-money offerings.
Current report
Net income, including or excluding the impact of F/X, decreased 5% and 1% for the quarter and year to date ended September 30, 2025, respectively. The decrease in Net income was mainly due to the decrease in fair value of our investment in Meituan, less interest income due to lower investment balance and interest rates, offset by the increase in Operating Profit.
Current report
Operating Profit (Loss)
Current report
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets(“ASU 2025-05”), which provides the option to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. ASU 2025-05 is effective for the Company from January 1, 2026, with early adoption permitted. We are currently evaluating the impact the adoption of this standard may have on our financial statements.
Current report
In September 2025, the FASB issued Accounting Standards Update 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software" (“ASU 2025-06”), which better aligns the accounting guidance to how software is developed by eliminating project stages from capitalization criteria, and further clarifies the threshold entities apply to begin capitalizing costs. The amendment also enhances the disclosure requirements for internal-use software. ASU 2025-06 is effective for the Company from January 1, 2028, with early adoption permitted. We are currently evaluating the impact the adoption of this standard may have on our financial statements.
Removed paragraphs (1)
Previous report
Operating Loss
Reworded paragraphs (22)
Previous wording
Yum China Holdings, Inc. is the largest restaurant company in China in terms of 2024 system sales, with 16,978 restaurants covering over 2,400 cities primarily in China as of June 30, 2025. Our growing restaurant network consists of our flagship KFC and Pizza Hut brands, as well as emerging brands such as Lavazza, Huang Ji Huang, Little Sheep and Taco Bell. We have the exclusive right to operate and sublicense the KFC, Pizza Hut and, subject to achieving certain agreed-upon milestones, Taco Bell brands in China (excluding Hong Kong, Macau and Taiwan), and own the intellectual property of the Little Sheep and Huang Ji Huang concepts outright. We also established a joint venture with Lavazza Group, the world-renowned family-owned Italian coffee company, to explore and develop the Lavazza coffee concept in China. KFC was the first major global restaurant brand to enter China in 1987. With more than 35 years of operations, we have developed extensive operating experience in the China market. We believe that there are significant opportunities to further expand within China, and we intend to focus our efforts on increasing our geographic footprint in both existing and new cities.
Current wording
Yum China Holdings, Inc. is the largest restaurant company in China in terms of 2024 system sales, with 17,514 restaurants covering over 2,500 cities primarily in China as of September 30, 2025. Our growing restaurant network consists of our flagship KFC and Pizza Hut brands, as well as emerging brands such as Lavazza, Huang Ji Huang, Little Sheep and Taco Bell. We have the exclusive right to operate and sublicense the KFC, Pizza Hut and, subject to achieving certain agreed-upon milestones, Taco Bell brands in China (excluding Hong Kong, Macau and Taiwan), and own the intellectual property of the Little Sheep and Huang Ji Huang concepts outright. We also established a joint venture with Lavazza Group, the world-renowned family-owned Italian coffee company, to explore and develop the Lavazza coffee concept in China. KFC was the first major global restaurant brand to enter China in 1987. With more than 35 years of operations, we have developed extensive operating experience in the China market. We believe that there are significant opportunities to further expand within China, and we intend to focus our efforts on increasing our geographic footprint in both existing and new cities.
Previous wording
KFC is the leading and the largest quick-service restaurant (“QSR”) brand in China in terms of system sales. As of June 30, 2025, KFC operated 12,238 restaurants in over 2,400 cities across China.
Current wording
KFC is the leading and the largest quick-service restaurant (“QSR”) brand in China in terms of system sales. As of September 30, 2025, KFC operated 12,640 restaurants in over 2,500 cities across China.
Previous wording
Pizza Hut is the leading and the largest casual dining restaurant (“CDR”) brand in China in terms of system sales and number of restaurants. As of June 30, 2025, Pizza Hut operated 3,864 restaurants in over 900 cities.
Current wording
Pizza Hut is the leading and the largest casual dining restaurant (“CDR”) brand in China in terms of system sales and number of restaurants. As of September 30, 2025, Pizza Hut operated 4,022 restaurants in over 900 cities.
Previous wording
As compared to the second quarter of 2024, Total revenues in the second quarter of 2025 increased 4%, including or excluding the impact of F/X. Total revenues for the year to date ended June 30, 2025 increased 2%, or 3% excluding the impact of F/X. The increase in Total revenues for the quarter ended June 30, 2025, excluding the impact of F/X, was primarily driven by 3% net new unit contribution and 1% same-store sales growth. The increase in Total revenues for the year to date ended June 30, 2025, excluding the impact of F/X, was primarily driven by 3% net new unit contribution.
Current wording
As compared to the third quarter of 2024, Total revenues in the third quarter of 2025 increased 4%, including or excluding the impact of F/X. Total revenues for the year to date ended September 30, 2025 increased 3%, including or excluding the impact of F/X. The increase in Total revenues for the quarter ended September 30, 2025, excluding the impact of F/X, was primarily driven by 3% net new unit contribution and 1% same-store sales growth. The increase in Total revenues for the year to date ended September 30, 2025, excluding the impact of F/X, was primarily driven by 3% net new unit contribution.
Previous wording
Operating profit for the second quarter increased 14%, including or excluding the impact of F/X. Operating profit for the year to date ended June 30, 2025 increased 10%, or 11% excluding the impact of F/X. The increase in Operating profit for the quarter and year to date ended June 30, 2025 was primarily driven by the increase in Total revenues, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased value-for-money offerings, increased delivery cost associated with higher delivery sales mix in the current period and wage inflation in the low single digits.
Current wording
Operating profit for the year to date ended September 30, 2025 increased 9%, including or excluding the impact of F/X. The increase in Operating profit for the year to date ended September 30, 2025 was primarily driven by the increase in Total revenues, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased value-for-money offerings and increased delivery cost associated with higher delivery sales mix in the current period.
Previous wording
As compared to the second quarter of 2024, the increase in Company sales for the quarter, excluding the impact of F/X, was primarily driven by net unit growth and same-store sales growth. The increase in Restaurant profit for the quarter, excluding the impact of F/X, was primarily driven by the increase in Company sales, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased rider cost associated with higher delivery sales mix in the current period, increased value-for-money offerings and wage inflation in the low single digits.
Current wording
As compared to the third quarter of 2024, the increase in Company sales for the quarter, excluding the impact of F/X, was primarily driven by net unit growth and same-store sales growth. The increase in Restaurant profit for the quarter, excluding the impact of F/X, was primarily driven by the increase in Company sales, efficiency improvement from streamlined operations and favorable commodity prices, partially offset by increased rider cost associated with higher delivery sales mix in the current period and increased value-for-money offerings.
Previous wording
The increase in Company sales for the year to date ended June 30, 2025, excluding the impact of F/X, was primarily driven by net unit growth. The year to date increase in Restaurant profit, excluding the impact of F/X, was primarily driven by the increase in Company sales, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased value-for-money offerings, increased rider cost associated with higher delivery sales mix in the current period and wage inflation in the low single digits.
Current wording
The increase in Company sales for the year to date ended September 30, 2025, excluding the impact of F/X, was primarily driven by net unit growth and same-store sales growth. The year to date increase in Restaurant profit, excluding the impact of F/X, was primarily driven by the increase in Company sales, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased rider cost associated with higher delivery sales mix in the current period and increased value-for-money offerings.
Previous wording
As compared to the second quarter of 2024, the increase in Company sales for the quarter, excluding the impact of F/X, was primarily driven by same-store sales growth and net unit growth. The increase in Restaurant profit for the quarter, excluding the impact of F/X, was primarily driven by the increase in Company sales, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased value-for-money offerings, with all-you-can-eat campaign shifted to the second quarter this year, increased delivery cost associated with higher delivery sales mix in the current period and wage inflation in the low single digits.
Current wording
As compared to the third quarter of 2024, the increase in Company sales for the quarter, excluding the impact of F/X, was primarily driven by net unit growth and same-store sales growth. The increase in Restaurant profit for the quarter, excluding the impact of F/X, was primarily driven by the increase in Company sales, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased value-for-money offerings and increased delivery cost associated with higher delivery sales mix in the current period.
Previous wording
The increase in Company sales for the year to date ended June 30, 2025, excluding the impact of F/X, was primarily driven by net unit growth and same-store sales growth, partially offset by more temporary closures mainly during the Chinese New Year holiday compared with the prior year. The year to date increase in Restaurant profit, excluding the impact of F/X, was primarily driven by the increase in Company sales, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased value-for-money offerings, increased delivery cost associated with higher delivery sales mix in the current period and wage inflation in the low single digits.
Current wording
The increase in Company sales for the year to date ended September 30, 2025, excluding the impact of F/X, was primarily driven by net unit growth and same-store sales growth, partially offset by more temporary closures mainly during the Chinese New Year holiday compared with the prior year. The year to date increase in Restaurant profit, excluding the impact of F/X, was primarily driven by the increase in Company sales, favorable commodity prices and efficiency improvement from streamlined operations, partially offset by increased value-for-money offerings and increased delivery cost associated with higher delivery sales mix in the current period.
Previous wording
The quarter and year to date decrease in Operating loss, excluding the impact of F/X, was primarily driven by the decrease in Operating loss from certain emerging brands.
Current wording
The quarter and year to date improvement in Operating profit (loss), excluding the impact of F/X, was primarily driven by the decrease in Operating loss from certain emerging brands.
Previous wording
Our income tax provision primarily includes tax on our earnings generally at the Chinese statutory tax rate of 25% with certain Chinese subsidiaries qualified for preferential tax rates, withholding tax on planned or actual repatriation of earnings outside of China, Hong Kong profits tax, and U.S. corporate income tax, if any. The higher effective tax rate for the quarter ended June 30, 2025 was primarily due to higher withholding tax associated with higher planned repatriation of earnings outside of China, and the impact from fair value change of our investment in Meituan. The higher effective tax rate for the year to date ended June 30, 2025 was primarily due to higher withholding tax associated with higher planned repatriation of earnings outside of China, less interest income subject to lower income tax rates and the impact from fair value change of our investment in Meituan.
Current wording
Our income tax provision primarily includes tax on our earnings generally at the Chinese statutory tax rate of 25% with certain Chinese subsidiaries qualified for preferential tax rates, withholding tax on planned or actual repatriation of earnings outside of China, Hong Kong profits tax, and U.S. corporate income tax, if any. The higher effective tax rate for the quarter ended September 30, 2025 was primarily due to the impact from fair value change of our investment in Meituan. The higher effective tax rate for the year to date ended September 30, 2025 was primarily due to higher withholding tax associated with higher planned repatriation of earnings outside of China, and the impact from fair value change of our investment in Meituan.
Previous wording
On June 7, 2022, the Chinese Ministry of Finance (“MOF”) and the STA jointly issued Circular [2022] No. 21, to extend full VAT credit refunds to more sectors and increase the frequency for accepting taxpayers’ applications. Beginning on July 1, 2022, entities engaged in providing catering services in China are allowed to apply for a lump sum refund of VAT assets accumulated prior to March 31, 2019. In addition, VAT assets accumulated after March 31, 2019 can be refunded on a monthly basis.
Current wording
In June 2022, the Chinese Ministry of Finance (“MOF”) and the STA jointly issued Announcement [2022] No. 21, to extend full VAT credit refunds to more sectors and increase the frequency for accepting taxpayers’ applications. Beginning on July 1, 2022, entities engaged in providing catering services in China are allowed to apply for a lump sum refund of VAT assets accumulated prior to March 31, 2019. In addition, VAT assets accumulated after March 31, 2019 can be refunded on a monthly basis. In August 2025, the MOF and the STA jointly issued Announcement [2025] No. 7, amending the VAT refund policy. Effective September 1, 2025, certain industries (including the catering sector) are only eligible for a partial refund of VAT assets, subject to additional criteria stipulated in the announcement.
Previous wording
As of June 30, 2025, current VAT assets of $120 million, non-current VAT assets of $8 million and net VAT payable of $9 million were recorded in Prepaid expenses and other current assets, Other assets and Accounts payable and other current liabilities, respectively, in the Condensed Consolidated Balance Sheets.
Current wording
As of September 30, 2025, current VAT assets of $124 million, non-current VAT assets of $13 million and net VAT payable of $6 million were recorded in Prepaid expenses and other current assets, Other assets and Accounts payable and other current liabilities, respectively, in the Condensed Consolidated Balance Sheets.
Previous wording
Net cash provided by operating activities was $864 million in 2025 as compared to $843 million in 2024. The increase was primarily driven by the increase in Operating profit along with working capital changes.
Current wording
Net cash provided by operating activities was $1,341 million in 2025 as compared to $1,252 million in 2024. The increase was primarily driven by the increase in Operating profit along with working capital changes.
Previous wording
Net cash used in investing activities was $290 million in 2025 as compared to $132 million in 2024. The increase was mainly due to the net impact on cash flows resulting from purchases and maturities of short-term investments, and long-term bank deposits and notes, partially offset by the decrease in capital spending.
Current wording
Net cash used in investing activities was $316 million in 2025 as compared to $28 million in 2024. The increase was mainly due to the net impact on cash flows resulting from purchases and maturities of short-term investments, and long-term bank deposits and notes, partially offset by the decrease in capital spending.
Previous wording
Net cash used in financing activities was $709 million in 2025 as compared to $785 million in 2024. The decrease was primarily driven by the decrease in share repurchases, partially offset by the lapping impact from the proceeds from short-term bank borrowings received in prior year and repaid in current year and increase of cash dividends paid on common stock.
Current wording
Net cash used in financing activities was $1,107 million in 2025 as compared to $1,159 million in 2024. The decrease was primarily driven by the fluctuation in share repurchases, partially offset by the decrease in the proceeds from short-term bank borrowings and increase of cash dividends paid on common stock.
Previous wording
The Company’s Board of Directors has authorized an aggregate of $4.4 billion for our share repurchase program, including its most recent increase in authorization on November 4, 2024. Yum China may repurchase shares under this program from time to time in the open market or, subject to applicable regulatory requirements, through privately negotiated transactions, block trades, accelerated share repurchase transactions and the use of Rule 10b5-1 trading plans. During the years to date ended June 30, 2025 and 2024, the Company repurchased 7.7 million shares of common stock for $356 million and 21.7 million shares of common stock for $868 million, respectively, under the repurchase program, excluding transaction costs and excise tax.
Current wording
The Company’s Board of Directors has authorized an aggregate of $4.4 billion for our share repurchase program, including its most recent increase in authorization on November 4, 2024. Yum China may repurchase shares under this program from time to time in the open market or, subject to applicable regulatory requirements, through privately negotiated transactions, block trades, accelerated share repurchase transactions and the use of Rule 10b5-1 trading plans. During the years to date ended September 30, 2025 and 2024, the Company repurchased 14.9 million shares of common stock for $682 million and 27.3 million shares of common stock for $1,055 million, respectively, under the repurchase program, excluding transaction costs and excise tax.
Previous wording
For the quarters ended June 30, 2025 and 2024, the Company paid cash dividends of approximately $90 million and $62 million, respectively, and for the years to date ended June 30, 2025 and 2024, the Company paid aggregate cash dividends of approximately $180 million and $126 million, respectively, to stockholders through a quarterly dividend payment of $0.24 and $0.16 per share, respectively.
Current wording
For the quarters ended September 30, 2025 and 2024, the Company paid cash dividends of approximately $88 million and $61 million, respectively, and for the years to date ended September 30, 2025 and 2024, the Company paid aggregate cash dividends of approximately $268 million and $187 million, respectively, to stockholders through a quarterly dividend payment of $0.24 and $0.16 per share, respectively.
Previous wording
The Company plans to return $3 billion to shareholders in 2025 through 2026, adding to the $1.5 billion it delivered to shareholders in 2024. The Company expects the total return of capital for 2025 to be at least $1.2 billion.
Current wording
The Company plans to return $3 billion to shareholders in 2025 through 2026, adding to the $1.5 billion it delivered to shareholders in 2024. The Company expects to return a total of approximately $1.5 billion to shareholders in 2025 in share repurchases and dividends.
Previous wording
On August 5, 2025, the Board of Directors declared a cash dividend of $0.24 per share, payable on September 23, 2025, to stockholders of record as of the close of business on September 2, 2025. The total estimated cash dividend payable is approximately $88 million.
Current wording
On November 4, 2025, the Board of Directors declared a cash dividend of $0.24 per share, payable on December 23, 2025, to stockholders of record as of the close of business on December 2, 2025. The total estimated cash dividend payable is approximately $87 million.
Previous wording
As of June 30, 2025, the Company had credit facilities of RMB9,666 million (approximately $1,349 million), comprised of onshore credit facilities in the aggregate amount of RMB6,800 million (approximately $949 million), offshore credit facilities in the aggregate amount of $200 million and a credit facility of $200 million that can be used for either onshore or offshore.
Current wording
As of September 30, 2025, the Company had credit facilities of RMB9,649 million (approximately $1,355 million), comprised of onshore credit facilities in the aggregate amount of RMB6,800 million (approximately $955 million), offshore credit facilities in the aggregate amount of $200 million and a credit facility of $200 million that can be used for either onshore or offshore.
Previous wording
The credit facilities had remaining terms ranging from less than one year to three years as of June 30, 2025. Our credit facilities mainly include term loans, overdrafts, letters of credit, banker’s acceptance notes and bank guarantees. The credit facilities in general bear interest based on the Loan Prime Rate (“LPR”) published by the National Interbank Funding Centre of the PRC, or Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York. Each credit facility contains a cross-default provision whereby our failure to make any payment on a principal amount from any credit facility will constitute a default on other credit facilities. Some of the credit facilities contain covenants limiting, among other things, certain additional indebtedness and liens, and certain other transactions specified in the respective agreements. As of June 30, 2025, we had outstanding bank guarantees of RMB268 million (approximately $37 million) mainly to secure our lease payments to landlords for certain Company-owned restaurants. The credit facilities were therefore reduced by the same amount, while there were no bank borrowings outstanding as of June 30, 2025. As of June 30, 2025, the Company had unused credit facilities of approximately $1,312 million.
Current wording
The credit facilities had remaining terms ranging from less than one year to three years as of September 30, 2025. Our credit facilities mainly include term loans, overdrafts, letters of credit, banker’s acceptance notes and bank guarantees. The credit facilities in general bear interest based on the Loan Prime Rate (“LPR”) published by the National Interbank Funding Centre of the PRC, or Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York. Each credit facility contains a cross-default provision whereby our failure to make any payment on a principal amount from any credit facility will constitute a default on other credit facilities. Some of the credit facilities contain covenants limiting, among other things, certain additional indebtedness and liens, and certain other transactions specified in the respective agreements. As of September 30, 2025, we had outstanding short-term bank borrowings of RMB210 million (approximately $29 million), mainly to manage working capital at our operating subsidiaries. Such bank borrowings are due within one year from their issuance dates. As of September 30, 2025, we also had outstanding bank guarantees of RMB280 million (approximately $40 million) mainly to secure our lease payments to landlords for certain Company-owned restaurants. Our credit facilities were therefore reduced by outstanding short-term bank borrowings, adjusted for unamortized interest and outstanding guarantees. As of September 30, 2025, the Company had unused credit facilities of approximately $1,286 million.