Riding High on KFC, Pizza Hut Success, Yum China Accelerates Expansion to Surpass 20,000 Stores in 2021

Yum China, the company behind KFC and Pizza Hut, has expressed its plans to further expand its footprint after a profitable second quarter. The robust financial performances from both KFC and Pizza Hut were significant factors in the company’s growth.

Strong Quarterly Performance Fuels Expansion Plans

Yum China’s revenue rose 13% YoY to $3.1 billion for the second quarter, which concluded on June 30. A 6% increase in system sales, discounting foreign exchange impacts, exceeded the broader performance of China’s catering industry. The company also marked a second-quarter record, with an operating profit of $348 million.

Customer demand has shown resilience, with same-store sales witnessing a marginal 1% growth. This growth, driven by a 5% increase in transactions, marks the 14th consecutive quarter of transaction growth. The quarter saw the opening of 560 new stores, a 67% increase from the previous year, elevating the total number of restaurants to 19,297. Yum China has also indicated its plans to surpass the 20,000 store milestone by the end of the year.

KFC and Pizza Hut Lead the Way

KFC has spearheaded growth for Yum China, opening 335 new stores to reach a staggering total of 13,789 locations. System sales for KFC have climbed by 7%, while same-store sales have grown by 1% for the fifth consecutive quarter.

Pizza Hut has also seen increased traction, with the addition of 174 new stores – nearly double the number opened during the same period last year. System sales for Pizza Hut have grown by 6%, while same-store transactions have surged by 13%.

Joey Wat, CEO of Yum China, spoke about the company’s imminent breakthrough: becoming the owner of the Pizza Hut brand in Mainland China. He mentioned that the company anticipates savings in license fees to facilitate margin expansion.

Newer concepts are also gaining momentum. Kpro, Yum China’s light-meal business, is projected to reach about 800 locations this year. KCoffee Café has expanded to more than 3,300 locations, and Pizza Hut’s Burger Bar, with plans to reach 500 to 600 locations by year-end, now operates in more than 200 outlets.

The company has reaffirmed its 2026 outlook, predicting high single-digit operating profit growth and double-digit EPS growth. This excludes the anticipated impact of the acquisition of the Pizza Hut brand in mainland China, expected to finalize next month. Following the acquisition, Yum China aims for more than 800 net new store openings annually from 2027.