Yum China Holdings (NYSE:YUMC) shares rose 1.5% in early trading Wednesday after the operator of KFC and Pizza Hut in China delivered a fourth-quarter earnings beat and outlined a massive capital return plan for 2026.
Despite a challenging consumer environment in China, the Shanghai-based company reported total revenue of $2.8 billion for the quarter—a 9% increase year-over-year—beating the analyst consensus of $2.72 billion.
Adjusted earnings per share of $0.40 also surpassed the $0.37 expected by Wall Street.
The growth was spearheaded by a 34% surge in delivery sales, which now account for more than half (53%) of the company’s total sales.
The quarter was marked by aggressive physical expansion, with Yum China opening a fourth-quarter record of 587 net new stores.
This brought the total store count to 18,101 by the end of 2025, keeping the company firmly on track to hit its goal of 20,000 stores by the end of 2026.
"Our fourth-quarter performance capped off 2025 on a high note," said CEO Joey Wat.
"We delivered same-store sales growth for three consecutive quarters and transaction growth for twelve. We are entering 2026 with a leaner, more digitalized business ready to capture the 'white space' in lower-tier cities."
Investors were particularly cheered by the company’s capital allocation strategy.
The board declared a 21% increase in the quarterly dividend to $0.29 per share and confirmed it is on track to return $1.5 billion to shareholders in 2026 through dividends and buybacks.
Already, the company has entered into $460 million in share repurchase agreements for the first half of 2026.