EX-99.1

Key Financial Results

      
     First Quarter

      
     %/ppts Change

      
     2025

     2024

     Reported

     Ex F/X

System Sales Growth (1) (%)

2

6

NM

NM

Same-Store Sales Growth (1) (%)

Even

(3

)

NM

NM

Operating Profit ($mn)

399

374

+7

+8

Adjusted Operating Profit (2) ($mn)

399

374

+7

+8

Core Operating Profit (2) (3) ($mn)

405

374

NM

+8

OP Margin (4) (%)

13.4

12.6

+0.8

+0.8

Core OP Margin (2) (5) (%)

13.4

12.6

NM

+0.8

Net Income ($mn)

292

287

+2

+3

Adjusted Net Income (2) ($mn)

292

287

+2

+3

Diluted Earnings Per Common Share ($)

0.77

0.71

+8

+10

Adjusted Diluted Earnings Per Common Share (2) ($)

0.77

0.71

+8

+10

1 System sales and same-store sales percentages exclude the impact of F/X. Effective January 1, 2018, temporary store closures are normalized in the same-store sales calculation by excluding the period during which stores are temporarily closed.

2 See “Reconciliation of Reported GAAP Results to Non-GAAP Measures” included in the accompanying tables of this release for further details.

3 Core operating profit is defined as operating profit adjusted for special items, further excluding items affecting comparability and the impact of F/X. The Company uses core operating profit for the purposes of evaluating the performance of its core operations. Current period amounts are derived by translating results at average exchange rates of the prior year period.

4 OP margin refers to operating profit as a percentage of total revenues.

5 Core OP margin refers to core operating profit as a percentage of total revenues excluding F/X.

Note: All comparisons are versus the same period a year ago.

Percentages may not recompute due to rounding.

NM refers to not meaningful.

Capital Returns to Shareholders

•

The Company is on track to return a total of $3 billion to shareholders in 2025 through 2026, in addition to the $1.5 billion delivered to shareholders in 2024. The average annual amount of capital return over the three years is around 9% of our market capitalization as of April 29, 2025.

•

In the first quarter, the Company returned $262 million in capital to shareholders through $172 million in share repurchases and $90 million in cash dividends. The Company repurchased 3.6 million shares of common stock during the quarter.

•

As of March 31, 2025, approximately $1.1 billion remained available for future share repurchases under the current authorization program.

•

The Board declared a cash dividend of $0.24 per share on Yum China’s common stock, payable on June 18, 2025 to shareholders of record as of the close of business on May 28, 2025.

KFC

      
     First Quarter

      
     %/ppts Change

      
     2025

     2024

     Reported

     Ex F/X

Restaurants

11,943

10,603

+13

NM

System Sales Growth (%)

3

7

NM

NM

Same-Store Sales Growth (%)

Even

(2

)

NM

NM

Total Revenues ($mn)

2,246

2,230

+1

+2

Operating Profit ($mn)

386

372

+4

+5

Core Operating Profit ($mn)

391

372

NM

+5

OP Margin (%)

17.2

16.7

+0.5

+0.5

Restaurant Margin (%)

19.8

19.3

+0.5

+0.5

•

System sales for KFC grew 3% YoY. Same-store sales reached 100% of the prior year's level. Same-store transactions grew 4% YoY, the ninth consecutive quarter of growth. Ticket average was 4% lower YoY, driven mainly by wider price ranges to expand the addressable market.

•

Delivery sales grew 13% YoY, contributing approximately 43% of KFC’s Company sales.

•

KFC opened 295 net new stores during the quarter, with 122 net new stores opened by franchisees, accounting for 41%. Total store count reached 11,943 as of March 31, 2025.

•

Operating profit grew 4% YoY to $386 million. Core operating profit increased 5% YoY.

•

OP margin was 17.2%, an increase of 50 basis points YoY.

•

Restaurant margin was 19.8%, expanding 50 basis points YoY, primarily due to favorable commodity prices and simplified operations, partially offset by the impact of increased value-for-money offerings, wage inflation and higher rider cost due to the increased delivery mix.

Pizza Hut

      
     First Quarter

      
     %/ppts Change

      
     2025

     2024

     Reported

     Ex F/X

Restaurants

3,769

3,425

+10

NM

System Sales Growth (%)

2

4

NM

NM

Same-Store Sales Growth (%)

Even

(5

)

NM

NM

Total Revenues ($mn)

595

595

Even

+1

Operating Profit ($mn)

60

47

+27

+29

Core Operating Profit ($mn)

61

47

NM

+29

OP Margin (%)

10.1

7.9

+2.2

+2.2

Restaurant Margin (%)

14.4

12.5

+1.9

+1.9

•

System sales for Pizza Hut grew 2% YoY. Same-store sales reached 100% of the prior year's level. Same-store transactions grew 17% YoY, the ninth consecutive quarter of growth. Ticket average was 14% lower YoY, consistent with our strategy and driven mainly by better value-for-money.

•

Pizza Hut opened 45 net new stores during the quarter, with 15 net new stores opened by franchisees, accounting for 33%. Total store count reached 3,769 as of March 31, 2025.

•

Delivery sales grew 13% YoY, contributing approximately 42% of Pizza Hut’s Company sales.

•

Operating profit grew 27% to $60 million. Core operating profit increased 29% YoY.

•

OP margin was 10.1%, an increase of 220 basis points YoY.

•

Restaurant margin was 14.4%, expanding 190 basis points YoY, primarily due to favorable commodity prices, simplified operations and automation, partially offset by wage inflation and higher rider cost due to the increased delivery mix.

Outlook

•

The Company targets approximately 1,600 to 1,800 net new stores and capital expenditures in the range of approximately $700 million to $800 million for the 2025 fiscal year.

•

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 anticipates the franchise mix of net new stores will gradually increase to 40-50% for KFC and 20-30% for Pizza Hut over the next few years.

Note on Non-GAAP Measures

Reported GAAP results include items that are excluded from non-GAAP measures. See “Reconciliation of Reported GAAP Results to Non-GAAP Measures” and “Segment Results” within this release for non-GAAP reconciliation details.

Conference Call

Yum China’s management will hold an earnings conference call at 7:00 a.m. U.S. Eastern Time on Wednesday, April 30, 2025 (7:00 p.m. Beijing/Hong Kong Time on Wednesday, April 30, 2025).

A live webcast of the call may be accessed at https://edge.media-server.com/mmc/p/jnrqo5nh.

To join by phone, please register in advance of the conference through the link provided below. Upon registering, you will be provided with participant dial-in numbers and a unique access PIN.

Pre-registration Link: https://register-conf.media-server.com/register/BId802dc952e3f40ed86f25771a575618c

A replay of the webcast will be available two hours after the event and will remain accessible until April 29, 2026. Additionally, earnings release accompanying slides will be available at the Company’s Investor Relations website http://ir.yumchina.com.

For important news and information regarding Yum China, including our filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange, visit Yum China's Investor Relations website at http://ir.yumchina.com. Yum China uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including under “Outlook.” We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as “expect,” “expectation,” “believe,” “anticipate,” “may,” “could,” “intend,” “belief,” “plan,” “estimate,” “target,” “predict,” “project,” “likely,” “will,” “continue,” “should,” “forecast,” “outlook,” “commit” or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements include, without limitation, statements regarding the future strategies, growth, business plans, investments, store openings, franchise mix of net new stores, capital expenditures, dividend and share repurchase plans, CAGR for system sales, operating profit and EPS, earnings, performance and returns of Yum China, anticipated effects of population and macroeconomic trends, pace of recovery of Yum China's business, the anticipated effects of our innovation, digital and delivery capabilities and investments on growth and beliefs regarding the long-term drivers of Yum China’s business. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks and uncertainties that are difficult to predict and could cause our actual results or events to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or assumptions will be achieved. The forward-looking statements included in this press release are only made as of the date of this press release, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. Numerous factors could cause our actual results or events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to achieve development goals at the times and in the amounts currently anticipated, if at all, the success of our marketing campaigns and product innovation, our ability to maintain food safety and quality control systems, changes in public health conditions, our ability to control costs and expenses, including tax costs, changes in political, economic and regulatory conditions in China, as well as changes in political, business, economic and trade relations between the U.S. and China, and those set forth under the caption “Risk Factors” in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Our plan of capital returns to shareholders is based on current expectations, which may change based on market conditions, capital needs or otherwise. In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q) for additional detail about factors that could affect our financial and other results.

About Yum China Holdings, Inc.

Yum China is the largest restaurant company in China with a mission to make every life taste beautiful. The Company operates over 16,000 restaurants under six brands across over 2,300 cities in China. KFC and Pizza Hut are the leading brands in the quick-service and casual dining restaurant spaces in China, respectively. In addition, Yum China has partnered with Lavazza to develop the Lavazza coffee concept in China. Little Sheep and Huang Ji Huang specialize in Chinese cuisine. Taco Bell offers innovative Mexican-inspired food. Yum China has a world-class, digitalized supply chain, which includes an extensive network of logistics centers nationwide and an in-house supply chain management system. Its strong digital capabilities and loyalty program enable the Company to reach customers faster and serve them better. Yum China is a Fortune 500 company with the vision to be the world’s most innovative pioneer in the restaurant industry. For more information, please visit http://ir.yumchina.com.

Contacts


Investor Relations Contact:
		Tel: +86 21 2407 7556 IR@YumChina.com
Media Contact:
		Tel: +86 21 2407 8288 / +852 2267 5807 Media@YumChina.com

Yum China Holdings, Inc.

Condensed Consolidated Statements of Income

(in US$ million, except per share data)

(unaudited)


	Quarter Ended						% Change
	3/31/2025			3/31/2024			B/(W)
Revenues
Company sales	$	2,801		$	2,794			—
Franchise fees and income		27			25			7
Revenues from transactions with franchisees		121			107			13
Other revenues		32			32			—
Total revenues		2,981			2,958			1
Costs and Expenses, Net
Company restaurants
Food and paper		874			896			2
Payroll and employee benefits		719			708			(2	)
Occupancy and other operating expenses		688			697			1
Company restaurant expenses		2,281			2,301			1
General and administrative expenses		138			140			2
Franchise expenses		11			10			(12	)
Expenses for transactions with franchisees		117			104			(13	)
Other operating costs and expenses		29			29			2
Closures and impairment expenses, net		6			1		NM
Other income, net		—			(1	)	NM
Total costs and expenses, net		2,582			2,584			—
Operating Profit		399			374			7
Interest income, net		26			38			(30	)
Investment gain		3			8			(67	)
Income Before Income Taxes and Equity in Net Earnings (Losses) from Equity Method Investments		428			420			2
Income tax provision		(119	)		(113	)		(5	)
Equity in net earnings (losses) from equity method investments		4			—		NM
Net income – including noncontrolling interests		313			307			2
Net income – noncontrolling interests		21			20			(4	)
Net Income – Yum China Holdings, Inc.	$	292		$	287			2
Effective tax rate		27.8	%		26.9	%		(0.9	)	ppts.

Basic Earnings Per Common Share	$	0.78		$	0.72
Weighted-average shares outstanding (in millions)		376			401

Diluted Earnings Per Common Share	$	0.77		$	0.71
Weighted-average shares outstanding (in millions)		378			403



OP margin		13.4	%		12.6	%		0.8		ppts.

Company sales		100.0	%		100.0	%
Food and paper		31.2			32.1			0.9		ppts.
Payroll and employee benefits		25.7			25.4			(0.3	)	ppts.
Occupancy and other operating expenses		24.5			24.9			0.4		ppts.
Restaurant margin		18.6	%		17.6	%		1.0		ppts.

Percentages may not recompute due to rounding. NM refers to not meaningful.

Yum China Holdings, Inc.

KFC Operating Results

(in US$ million)

(unaudited)


	Quarter Ended						% Change
	3/31/2025			3/31/2024			B/(W)
Revenues
Company sales	$	2,208		$	2,193			1
Franchise fees and income		21			18			11
Revenues from transactions with franchisees		16			14			20
Other revenues		1			5			(78	)
Total revenues		2,246			2,230			1
Costs and Expenses, Net
Company restaurants
Food and paper		685			694			1
Payroll and employee benefits		554			542			(2	)
Occupancy and other operating expenses		532			535			1
Company restaurant expenses		1,771			1,771			—
General and administrative expenses		59			61			4
Franchise expenses		10			9			(9	)
Expenses for transactions with franchisees		14			12			(21	)
Other operating costs and expenses		1			4			74
Closures and impairment expenses, net		5			1		NM
Total costs and expenses, net		1,860			1,858			—
Operating Profit	$	386		$	372			4
OP margin		17.2	%		16.7	%		0.5		ppts.

Company sales		100.0	%		100.0	%
Food and paper		31.1			31.7			0.6		ppts.
Payroll and employee benefits		25.1			24.7			(0.4	)	ppts.
Occupancy and other operating expenses		24.0			24.3			0.3		ppts.
Restaurant margin		19.8	%		19.3	%		0.5		ppts.

Percentages may not recompute due to rounding. NM refers to not meaningful.

Yum China Holdings, Inc.

Pizza Hut Operating Results

(in US$ million)

(unaudited)


	Quarter Ended						% Change
	3/31/2025			3/31/2024			B/(W)
Revenues
Company sales	$	584		$	587			(1	)
Franchise fees and income		2			2			23
Revenues from transactions with franchisees		2			1			70
Other revenues		7			5			18
Total revenues		595			595			—
Costs and Expenses, Net
Company restaurants
Food and paper		186			198			6
Payroll and employee benefits		163			162			(1	)
Occupancy and other operating expenses		151			154			2
Company restaurant expenses		500			514			3
General and administrative expenses		26			27			4
Franchise expenses		1			1			(16	)
Expenses for transactions with franchisees		2			1			(50	)
Other operating costs and expenses		6			5			(14	)
Total costs and expenses, net		535			548			3
Operating Profit	$	60		$	47			27
OP margin		10.1	%		7.9	%		2.2		ppts.

Company sales		100.0	%		100.0	%
Food and paper		31.8			33.7			1.9		ppts.
Payroll and employee benefits		27.9			27.6			(0.3	)	ppts.
Occupancy and other operating expenses		25.9			26.2			0.3		ppts.
Restaurant margin		14.4	%		12.5	%		1.9		ppts.

Percentages may not recompute due to rounding.

Yum China Holdings, Inc.

Condensed Consolidated Balance Sheets

(in US$ million)


	3/31/2025			12/31/2024
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	825		$	723
Short-term investments		1,167			1,121
Accounts receivable, net		81			79
Inventories, net		329			405
Prepaid expenses and other current assets		348			366
Total Current Assets		2,750			2,694
Property, plant and equipment, net		2,383			2,407
Operating lease right-of-use assets		2,111			2,146
Goodwill		1,891			1,880
Intangible assets, net		144			144
Long-term bank deposits and notes		932			1,088
Equity investments		395			368
Deferred income tax assets		139			138
Other assets		257			256
Total Assets		11,002			11,121

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current Liabilities
Accounts payable and other current liabilities		1,922			2,080
Short-term borrowings		129			127
Income taxes payable		139			76
Total Current Liabilities		2,190			2,283
Non-current operating lease liabilities		1,774			1,816
Non-current finance lease liabilities		49			49
Deferred income tax liabilities		394			389
Other liabilities		156			157
Total Liabilities		4,563			4,694

Redeemable Noncontrolling Interest		13			13

Equity
Common stock, $0.01 par value; 1,000 million shares authorized; 375 million shares and 379 million shares issued at March 31, 2025 and December 31, 2024, respectively; 375 million shares and 378 million shares outstanding at March 31, 2025 and December 31, 2024, respectively.		4			4
Treasury stock		(8	)		(52	)
Additional paid-in capital		3,982			4,028
Retained earnings		2,124			2,089
Accumulated other comprehensive loss		(318	)		(341	)
Total Yum China Holdings, Inc. Stockholders' Equity		5,784			5,728
Noncontrolling interests		642			686
Total Equity		6,426			6,414
Total Liabilities, Redeemable Noncontrolling Interest and Equity	$	11,002		$	11,121

Yum China Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in US$ million)

(unaudited)


	Quarter Ended
	3/31/2025			3/31/2024
Cash Flows – Operating Activities
Net income – including noncontrolling interests	$	313		$	307
Depreciation and amortization		109			117
Non-cash operating lease cost		99			101
Closures and impairment expenses		6			1
Investment gain		(3	)		(8	)
Equity in net (earnings) losses from equity method investments		(4	)		—
Distributions of income received from equity method investments		4			2
Deferred income taxes		2			—
Share-based compensation expense		9			10
Changes in accounts receivable		(2	)		(3	)
Changes in inventories		78			74
Changes in prepaid expenses, other current assets and value-added tax assets		25			(8	)
Changes in accounts payable and other current liabilities		(179	)		(136	)
Changes in income taxes payable		61			73
Changes in non-current operating lease liabilities		(101	)		(100	)
Other, net		35			12
Net Cash Provided by Operating Activities		452			442
Cash Flows – Investing Activities
Capital spending		(137	)		(189	)
Purchases of short-term investments, long-term bank deposits and notes		(1,838	)		(268	)
Maturities of short-term investments, long-term bank deposits and notes		1,916			555
Acquisition of equity investment		(14	)		—
Other, net		1			1
Net Cash (Used in) Provided by Investing Activities		(72	)		99
Cash Flows – Financing Activities
Repurchase of shares of common stock		(173	)		(679	)
Cash dividends paid on common stock		(90	)		(64	)
Dividends paid to noncontrolling interests		(13	)		(16	)
Other, net		(4	)		(17	)
Net Cash Used in Financing Activities		(280	)		(776	)
Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash		2			(10	)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash		102			(245	)
Cash, Cash Equivalents, and Restricted Cash - Beginning of Period		723			1,128
Cash, Cash Equivalents, and Restricted Cash - End of Period	$	825		$	883

In this press release:

•

Certain performance metrics and non-GAAP measures are presented excluding the impact of foreign currency translation (“F/X”). These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the F/X impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.

•

System sales growth reflects the results of all restaurants regardless of ownership, including Company-owned and franchise restaurants that operate our restaurant concepts, except for non-Company-owned restaurants for which we do not receive a sales-based royalty. Sales of franchise restaurants typically generate ongoing franchise fees for the Company at an average rate of approximately 6% of system sales. Franchise restaurant sales are not included in Company sales in the Condensed Consolidated Statements of Income; however, the franchise fees are included in the Company’s revenues. We believe system sales growth is useful to investors as a significant indicator of the overall strength of our business as it incorporates all of our revenue drivers, Company and franchise same-store sales as well as net unit growth.

•

Effective January 1, 2018, the Company revised its definition of same-store sales growth to represent the estimated percentage change in sales of food of all restaurants in the Company system that have been open prior to the first day of our prior fiscal year, excluding the period during which stores are temporarily closed. We refer to these as our "base" stores. Previously, same-store sales growth represented the estimated percentage change in sales of all restaurants in the Company system that have been open for one year or more, including stores temporarily closed, and the base stores changed on a rolling basis from month to month. This revision was made to align with how management measures performance internally and focuses on trends of a more stable base of stores.

Unit Count by Brand

KFC


	12/31/2024		New Builds		Closures			3/31/2025
Company-owned		10,187		267		(94	)		10,360
Franchisees		1,461		130		(8	)		1,583
Total		11,648		397		(102	)		11,943

Pizza Hut


	12/31/2024		New Builds		Closures			3/31/2025
Company-owned		3,525		108		(78	)		3,555
Franchisees		199		17		(2	)		214
Total		3,724		125		(80	)		3,769

Others


	12/31/2024		New Builds		Closures			3/31/2025
Company-owned		175		2		(20	)		157
Franchisees		848		6		(81	)		773
Total		1,023		8		(101	)		930

Reconciliation of Reported GAAP Results to Non-GAAP Measures

(in millions, except per share data)

(unaudited)

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) in this press release, the Company provides the following non-GAAP measures:

•

Measures adjusted for Special Items, which include Adjusted Operating Profit, Adjusted Net Income, Adjusted Earnings Per Common Share ("EPS"), Adjusted Effective Tax Rate and Adjusted EBITDA;

•

Company Restaurant Profit ("Restaurant profit") and Restaurant margin;

•

Core Operating Profit and Core OP margin, which exclude Special Items, and further adjusted for Items Affecting Comparability and the impact of F/X;

These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of these non-GAAP measures provides additional information to investors to facilitate the comparison of past and present results, excluding those items that the Company does not believe are indicative of our core operations.

With respect to non-GAAP measures adjusted for Special Items, the Company excludes impact from Special Items for the purpose of evaluating performance internally and uses them as factors in determining compensation for certain employees. Special Items are not included in any of our segment results.

Adjusted EBITDA is defined as net income including noncontrolling interests adjusted for equity in net earnings (losses) from equity method investments, income tax, interest income, net, investment gain or loss, depreciation and amortization, store impairment charges, and Special Items. Store impairment charges included as an adjustment item in Adjusted EBITDA primarily resulted from our semi-annual impairment evaluation of long-lived assets of individual restaurants, and additional impairment evaluation whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If these restaurant-level assets were not impaired, depreciation of the assets would have been recorded and included in EBITDA. Therefore, store impairment charges were a non-cash item similar to depreciation and amortization of our long-lived assets of restaurants. The Company believes that investors and analysts may find it useful in measuring operating performance without regard to such non-cash items.

Restaurant Profit is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales, including cost of food and paper, restaurant-level payroll and employee benefits, rent, depreciation and amortization of restaurant-level assets, advertising expenses, and other operating expenses. Company restaurant margin percentage is defined as Restaurant profit divided by Company sales. We also use Restaurant profit and Restaurant margin for the purposes of internally evaluating the performance of our Company-owned restaurants and we believe they provide useful information to investors as to the profitability of our Company-owned restaurants.

Core Operating Profit is defined as Operating Profit adjusted for Special Items, and further excluding Items Affecting Comparability and the impact of F/X. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Items such as charges, gains and accounting changes which are viewed by management as significantly impacting the current period or the comparable period, due to changes in policy or other external factors, or non-cash items pertaining to underlying activities that are different from or unrelated to our core operations, are generally considered “Items Affecting Comparability.” Examples of Items Affecting Comparability include, but are not limited to: temporary relief from landlords and government agencies; VAT deductions due to tax policy changes; and amortization of reacquired franchise rights recognized upon acquisitions. We believe presenting Core Operating Profit provides additional information to further enhance comparability of our operating results and we use this measure for purposes of evaluating the performance of our core operations. Core OP margin is defined as Core Operating Profit divided by Total revenues, excluding the impact of F/X.

The following tables set forth the reconciliation of the most directly comparable GAAP financial measures to the non-GAAP financial measures. The reconciliation of GAAP Operating Profit to Restaurant Profit and Core Operating Profit by segment is presented in Segment Results within this release.


	Quarter Ended
	3/31/2025			3/31/2024

Reconciliation of Operating Profit to Adjusted Operating Profit
Operating Profit	$	399		$	374
Special Items, Operating Profit		—			—
Adjusted Operating Profit	$	399		$	374
Reconciliation of Net Income to Adjusted Net Income
Net Income – Yum China Holdings, Inc.	$	292		$	287
Special Items, Net Income –Yum China Holdings, Inc.		—			—
Adjusted Net Income – Yum China Holdings, Inc.	$	292		$	287
Reconciliation of EPS to Adjusted EPS
Basic Earnings Per Common Share	$	0.78		$	0.72
Special Items, Basic Earnings Per Common Share		—			—
Adjusted Basic Earnings Per Common Share	$	0.78		$	0.72
Diluted Earnings Per Common Share	$	0.77		$	0.71
Special Items, Diluted Earnings Per Common Share		—			—
Adjusted Diluted Earnings Per Common Share	$	0.77		$	0.71
Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate
Effective tax rate		27.8	%		26.9	%
Impact on effective tax rate as a result of Special Items		—			—
Adjusted effective tax rate		27.8	%		26.9	%

Net income, along with the reconciliation to Adjusted EBITDA, is presented below:


	Quarter Ended
	3/31/2025			3/31/2024

Net Income – Yum China Holdings, Inc.	$	292		$	287
Net income – noncontrolling interests		21			20
Equity in net (earnings) losses from equity method investments		(4	)		—
Income tax provision		119			113
Interest income, net		(26	)		(38	)
Investment gain		(3	)		(8	)
Operating Profit		399			374
Special Items, Operating Profit		—			—
Adjusted Operating Profit		399			374
Depreciation and amortization		109			117
Store impairment charges		6			4
Adjusted EBITDA	$	514		$	495

Operating Profit, along with the reconciliation to Core Operating Profit, is presented below:


	Quarter ended						% Change
	3/31/2025			3/31/2024			B/(W)

Operating Profit	$	399		$	374			7
Special Items, Operating Profit		—			—
Adjusted Operating Profit	$	399		$	374			7
Items Affecting Comparability		—			—
F/X impact		6			—
Core Operating Profit	$	405		$	374			8
Total revenues		2,981			2,958			1
F/X impact		38			—
Total revenues, excluding the impact of F/X	$	3,019		$	2,958			2
Core OP margin		13.4	%		12.6	%		0.8	ppts.

Yum China Holdings, Inc.

Segment Results

(in US$ million)

(unaudited)


	Quarter Ended 3/31/2025
	KFC		Pizza Hut		All Other Segments			Corporate and Unallocated(1)			Elimination			Total
Company sales	$	2,208	$	584	$	9		$	—		$	—		$	2,801
Franchise fees and income		21		2		4			—			—			27
Revenues from transactions with franchisees(2)		16		2		19			84			—			121
Other revenues		1		7		170			17			(163	)		32
Total revenues	$	2,246	$	595	$	202		$	101		$	(163	)	$	2,981
Company restaurant expenses		1,771		500		11			—			(1	)		2,281
General and administrative expenses		59		26		8			45			—			138
Franchise expenses		10		1		—			—			—			11
Expenses for transactions with franchisees(2)		14		2		17			84			—			117
Other operating costs and expenses		1		6		167			17			(162	)		29
Closures and impairment expenses, net		5		—		1			—			—			6
Total costs and expenses, net		1,860		535		204			146			(163	)		2,582
Operating Profit (Loss)	$	386	$	60	$	(2	)	$	(45	)	$	—		$	399

Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:


	Quarter Ended 3/31/2025
	KFC			Pizza Hut			All Other Segments			Corporate and Unallocated(1)			Elimination			Total
GAAP Operating Profit (Loss)	$	386		$	60		$	(2	)	$	(45	)	$	—		$	399
Less:
Franchise fees and income		21			2			4			—			—			27
Revenues from transactions with franchisees(2)		16			2			19			84			—			121
Other revenues		1			7			170			17			(163	)		32
Add:
General and administrative expenses		59			26			8			45			—			138
Franchise expenses		10			1			—			—			—			11
Expenses for transactions with franchisees(2)		14			2			17			84			—			117
Other operating costs and expenses		1			6			167			17			(162	)		29
Closures and impairment expenses, net		5			—			1			—			—			6
Restaurant profit (loss)	$	437		$	84		$	(2	)	$	—		$	1		$	520
Company sales		2,208			584			9			—			—			2,801
Restaurant margin %		19.8	%		14.4	%		(20.9	)%	N/A			N/A				18.6	%

Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:


	Quarter Ended 3/31/2025
	KFC		Pizza Hut		All Other Segments			Corporate and Unallocated(1)			Elimination		Total
GAAP Operating Profit (Loss)	$	386	$	60	$	(2	)	$	(45	)	$	—	$	399
Special Items, Operating Profit		—		—		—			—			—		—
Adjusted Operating Profit (Loss)	$	386	$	60	$	(2	)	$	(45	)	$	—	$	399
Items Affecting Comparability		—		—		—			—			—		—
F/X impact		5		1		—			—			—		6
Core Operating Profit (Loss)	$	391	$	61	$	(2	)	$	(45	)	$	—	$	405


	Quarter Ended 3/31/2024
	KFC		Pizza Hut		All Other Segments			Corporate and Unallocated(1)			Elimination			Total
Company sales	$	2,193	$	587	$	14		$	—		$	—		$	2,794
Franchise fees and income		18		2		5			—			—			25
Revenues from transactions with franchisees(2)		14		1		20			72			—			107
Other revenues		5		5		164			15			(157	)		32
Total revenues	$	2,230	$	595	$	203		$	87		$	(157	)	$	2,958
Company restaurant expenses		1,771		514		17			—			(1	)		2,301
General and administrative expenses		61		27		10			42			—			140
Franchise expenses		9		1		—			—			—			10
Expenses for transactions with franchisees(2)		12		1		19			72			—			104
Other operating costs and expenses		4		5		162			14			(156	)		29
Closures and impairment expenses, net		1		—		—			—			—			1
Other income, net		—		—		—			(1	)		—			(1	)
Total costs and expenses, net		1,858		548		208			127			(157	)		2,584
Operating Profit (Loss)	$	372	$	47	$	(5	)	$	(40	)	$	—		$	374

Reconciliation of GAAP Operating Profit to Restaurant Profit is as follows:


	Quarter Ended 3/31/2024
	KFC			Pizza Hut			All Other Segments			Corporate and Unallocated(1)			Elimination			Total
GAAP Operating Profit (Loss)	$	372		$	47		$	(5	)	$	(40	)	$	—		$	374
Less:
Franchise fees and income		18			2			5			—			—			25
Revenues from transactions with franchisees(2)		14			1			20			72			—			107
Other revenues		5			5			164			15			(157	)		32
Add:
General and administrative expenses		61			27			10			42			—			140
Franchise expenses		9			1			—			—			—			10
Expenses for transactions with franchisees(2)		12			1			19			72			—			104
Other operating costs and expenses		4			5			162			14			(156	)		29
Closures and impairment expenses, net		1			—			—			—			—			1
Other income, net		—			—			—			(1	)		—			(1	)
Restaurant profit (loss)	$	422		$	73		$	(3	)	$	—		$	1		$	493
Company sales		2,193			587			14			—			—			2,794
Restaurant margin %		19.3	%		12.5	%		(31.4	)%	N/A			N/A				17.6	%

Reconciliation of GAAP Operating Profit to Core Operating Profit is as follows:


	Quarter Ended 3/31/2024
	KFC		Pizza Hut		All Other Segments			Corporate and Unallocated(1)			Elimination		Total
GAAP Operating Profit (Loss)	$	372	$	47	$	(5	)	$	(40	)	$	—	$	374
Special Items, Operating Profit		—		—		—			—			—		—
Adjusted Operating Profit (Loss)	$	372	$	47	$	(5	)	$	(40	)	$	—	$	374
Items Affecting Comparability		—		—		—			—			—		—
F/X impact		—		—		—			—			—		—
Core Operating Profit (Loss)	$	372	$	47	$	(5	)	$	(40	)	$	—	$	374