Yum China Holdings, Inc. held its Investor Day on November 16, 2025, where CEO Joey Wat and CFO Adrian Ding outlined a new RGM 3.0 strategy and a three‑year financial outlook that includes a 20,000‑store expansion target by the end of 2026 and a commitment to return $1.5 billion in capital each year through 2026. The presentation emphasized resilience, growth, and moat—three pillars that the company says will be powered by innovation and operational efficiency across its KFC, Pizza Hut, and other brands.
The RGM 3.0 framework builds on the 2023 RGM 2.0 launch and focuses on three complementary forces: innovation and operational efficiency. Wat explained that the strategy is designed to “strengthen core competencies and build a strong foundation for future expansion.” By concentrating on technology‑driven efficiencies—such as generative AI tools and the Q‑Smart assistant for restaurant managers—the company aims to lift margins while scaling its store network. The emphasis on a moat reflects Yum China’s intent to protect its market share in China’s highly contested quick‑service and casual‑dining segments.
Yum China set a target of 20,000 restaurants by the end of 2026, a 100‑percent increase from the 10,000‑store milestone it reached in 2023. The company also plans to exceed 30,000 stores by 2030, adding roughly 600 net new locations each year. This aggressive pace is intended to capture growing urban and lower‑tier city demand, leveraging a hybrid equity‑and‑franchise model that balances capital efficiency with rapid deployment. The expansion targets are a direct response to the company’s historical growth trajectory, which saw it reach 10,000 stores in 33 years and now aims to double that in just six years.
Capital return is a key pillar of the new outlook. Yum China will return $1.5 billion annually through 2026 and, starting in 2027, will return 100 % of free cash flow after dividends to non‑controlling interests. The plan signals strong confidence in cash‑flow generation and a commitment to shareholder value. By tying the return to free cash flow, the company also signals that it will preserve capital for strategic investments while rewarding investors.
Brand‑specific goals were detailed for KFC and Pizza Hut. KFC is targeting operating profit above RMB 10 billion by 2028, with a 17 % same‑store transaction growth and an addition of 600 net new stores each year. Pizza Hut aims to double operating profit by 2029 and add 600 stores annually, leveraging its lower‑capex WOW format to penetrate lower‑tier cities. These targets illustrate the company’s focus on high‑margin, high‑growth brands and its belief that scale will drive profitability.
The strategy also highlights digital and supply‑chain innovation. Yum China announced generative AI tools, the Q‑Smart assistant for restaurant managers, and integrated supply‑chain parks designed to improve margins, reduce costs, and strengthen the company’s competitive moat. These initiatives are part of a broader effort to embed technology across the value chain, from procurement to customer experience, and to create a more resilient and efficient operation in China’s dynamic market.
Wat emphasized that the company’s “resilience, growth and moat” framework is a response to intense competition and evolving consumer preferences. He noted that the company’s rapid store expansion and capital‑return commitments demonstrate confidence in its ability to generate sustainable cash flow while delivering shareholder value.
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