Yum China (9987.HK): Q3 2026 Earnings Preview (Citi)
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Citi expects Yum China (9987.HK) to release third-quarter 2026 results in the first week of November. Against a bearish market backdrop, Citi forecasts group same-store sales (SSS) to decline 1% year over year, better than the consensus estimate of -2%. Helped by roughly 6% renminbi appreciation against the US dollar, dollar-denominated sales should grow 10% year over year, with restaurant profit up 13%, operating profit up 14% and net profit up 12%.
By brand, KFC's third-quarter SSS is projected to fall 1% with restaurant profit rising 11%, while Pizza Hut's SSS should dip 0.5% with restaurant profit up 23%. KFC stepped up promotions during the Golden Week—including an October RMB58 'Crazy Monday-to-Thursday' offer—and October SSS is expected to improve sequentially versus the third quarter.
With management having engaged actively with investors in September, Citi believes expectations are now well managed and sentiment toward the stock could recover ahead of the release. It expects management to guide to fourth-quarter sequential SSS improvement and to highlight Pizza Hut's year-over-year restaurant margin growth on the earnings call. Citi maintains its Buy rating with a target price of US$58.10.
Key exhibits
Exhibit 1
