Yum China Hldgs — Income Statement, Cash Flows & Balance Sheet
Is Yum China profitable?
Yum China is solidly profitable, with revenue and net income both growing steadily over the past three years.
| Metric | 2023 | 2024 | 2025 | Change (2024→2025) |
|---|---|---|---|---|
| Total revenues ($M) | 10,978 | 11,303 | 11,797 | +4.4% |
| Operating profit ($M) | 1,106 | 1,162 | 1,290 | +11.0% |
| Net income – Yum China ($M) | 827 | 911 | 929 | +2.0% |
| Operating margin | 10.1% | 10.3% | 10.9% | +0.6 pp |
Revenue growth has been consistent but modest, while operating profit grew at a faster clip, meaning the company is getting more efficient. Net income growth was slower than operating profit growth largely because interest income fell — the company earned less on its cash pile as deposit rates declined.
Earnings per share (EPS) grew noticeably faster than net income, thanks to an aggressive buyback program.
| Metric | 2023 | 2024 | 2025 | Change |
|---|---|---|---|---|
| Diluted EPS ($) | 1.97 | 2.33 | 2.51 | +7.7% |
| Weighted-avg shares, diluted (M) | 420 | 390 | 371 | −4.9% |
Yum China has been consistently buying back its own shares, which reduces the share count and lifts per-share earnings even when total profit growth is modest. This is a meaningful tailwind for existing shareholders.
Where does Yum China's revenue come from?
KFC is the dominant engine; Pizza Hut is improving but still earns a fraction of KFC's profit.
| Segment | Revenue 2024 ($M) | Revenue 2025 ($M) | Op. Profit 2024 ($M) | Op. Profit 2025 ($M) |
|---|---|---|---|---|
| KFC | 8,509 | 8,871 | 1,192 | 1,285 |
| Pizza Hut | 2,260 | 2,324 | 153 | 183 |
| All Other Segments | 181 | 184 | (15) | (1) |
KFC generates the overwhelming majority of both revenue and profit. Pizza Hut is growing and swung to a much stronger profit in 2025, while the smaller brands (Lavazza, Huang Ji Huang, Little Sheep, Taco Bell) collectively moved close to breakeven, a meaningful improvement from a meaningful loss the prior year.
Does Yum China generate cash?
Yum China converts profit into operating cash reliably, generating nearly $1.5 billion from its restaurants each year.
| Metric | 2023 | 2024 | 2025 | Change |
|---|---|---|---|---|
| Operating cash flow ($M) | 1,473 | 1,419 | 1,466 | +3.3% |
| Capital spending ($M) | (710) | (705) | (626) | −11.2% |
| Free cash flow (GAAP operating CF minus capex) ($M) | 763 | 714 | 840 | +17.6% |
Operating cash generation is stable and healthy. Capital spending — mostly new restaurant construction and equipment — actually fell in 2025, which drove a meaningful jump in free cash flow (the money left over after maintaining and growing the business). The company returned that cash generously to shareholders through buybacks and dividends.
Yum China returned over $1.5 billion to shareholders in 2025 alone.
| Return of Capital | 2023 | 2024 | 2025 |
|---|---|---|---|
| Share repurchases ($M) | 613 | 1,249 | 1,144 |
| Dividends paid ($M) | 216 | 248 | 353 |
| Total ($M) | 829 | 1,497 | 1,497 |
The dividend per share rose significantly, and the buyback program remains large relative to the company's size. Total shareholder returns through these two channels have well exceeded free cash flow in recent years, funded partly by drawing down the company's large cash and investment reserves.
How strong is Yum China's balance sheet?
Yum China carries virtually no meaningful debt and holds a large pool of liquid investments.
| Item | 2024 ($M) | 2025 ($M) | Change |
|---|---|---|---|
| Cash & equivalents | 723 | 506 | −30% |
| Short-term investments | 1,121 | 878 | −22% |
| Long-term bank deposits & notes | 1,088 | 678 | −38% |
| Short-term borrowings | 127 | 30 | −76% |
| Total liquid assets (cash + investments) | 2,932 | 2,062 | −$870M |
The company has no long-term debt. Short-term borrowings are minimal and used only for day-to-day working capital. The drop in liquid assets reflects the heavy shareholder return program — essentially, Yum China has been converting its cash pile into buybacks and dividends.
The largest balance sheet obligations are lease liabilities, not debt — a structural feature of the restaurant business.
| Item | 2024 ($M) | 2025 ($M) |
|---|---|---|
| Total operating + finance lease liabilities | 2,287 | 2,318 |
| Short-term borrowings | 127 | 30 |
| Total assets | 11,121 | 10,783 |
Leasing roughly 15,000 restaurant properties across China naturally creates large lease obligations on the balance sheet. These are not traditional debt but do represent contractual future cash payments. Overall, the balance sheet remains conservative and well-positioned, with no financial leverage risk in the conventional sense.