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Company’s workforce optimization solutions streamline critical resources across global industries

LINCOLNSHIRE, Ill.--(BUSINESS WIRE)--Zebra Technologies Corporation (NASDAQ: ZBRA), a global leader in digitizing and automating workflows to deliver intelligent operations, today announced Nucleus Research named Zebra Workcloud™ Task Management a Leader in its inaugural Task Management Value Matrix report. This follows last month's recognition of Zebra Workcloud Scheduling and Timekeeping as a Leader in the Nucleus Research Workforce Management Value Matrix. Both recognitions demonstrate Zebra’s leadership in providing innovative solutions that empower frontline workers in retail, transportation and logistics, banking, healthcare, manufacturing, and hospitality.

"Our AI-powered communication and collaboration solutions help businesses win in this new age of agile engagement, equipping them with critical tools that increase employee productivity and retention," said Suresh Menon, SVP and GM, Zebra Technologies

Share “We are proud to be distinguished as a Leader in the Nucleus Research Workforce Management and inaugural Task Management Value Matrices,” said Suresh Menon, Senior Vice President and General Manager, Software Solutions, Zebra Technologies. “Our AI-powered communication and collaboration solutions help businesses win in this new age of agile engagement, equipping them with critical tools that increase employee productivity and retention.”

The Nucleus Research Workforce Management Value Matrix report highlights how Zebra’s cloud-based Workcloud platform unifies corporate-to-store and frontline communication while automating workforce scheduling. Equipped with intelligent demand forecasting, inventory control, and loss prevention capabilities, the platform enables businesses to seamlessly streamline processes from the corporate level to the front line.

In addition, Workcloud is recognized by Nucleus Research for its comprehensive feature set, which helps organizations with large workforces in industries where customer or patient experience set the leaders apart. This feature set allows organizations to empower a connected frontline to improve communication and productivity while standardizing operational processes.

"We recognized Zebra as a Leader because its Workcloud Task Management solution provides the comprehensive functionality enterprise customers desire,” said Charlotte Belke, Analyst, Nucleus Research. “The solution’s capabilities for task management, combined with Zebra’s broader portfolio for the frontline, deliver a powerful combination for retailers looking to optimize store operations.”

Nucleus Research evaluated task and workforce management providers based on the usability and functionality of their solutions, assessing the value customers achieve.

KEY TAKEAWAYS

Zebra Workcloud Task Management, Scheduling and Timekeeping software have been recognized as leading solutions in their respective Nucleus Research Value Matrices. The designation of Zebra as a leader in frontline solutions highlights its dedication to customer success. Read more industry analyst reports evaluating Zebra here and learn more about specific use cases here. WHO IS ZEBRA TECHNOLOGIES?

Zebra (NASDAQ: ZBRA) provides the foundation for intelligent operations with an award-winning portfolio of connected frontline, asset visibility and automation solutions which empower our customers to deploy AI on the frontline. Organizations globally across retail, manufacturing, transportation, logistics, healthcare, and other industries rely on us to deliver outcomes today while driving innovation for what’s next. Together with our partners, we create new ways of working that improve productivity and empower organizations to be better every day. Learn more at www.zebra.com.

Follow Zebra on our Blog, LinkedIn, Facebook, X, Instagram and YouTube.

More News From Zebra Technologies Corporation

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It has been about a month since the last earnings report for Zebra Technologies (ZBRA - Free Report) . Shares have lost about 12.2% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Zebra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Zebra Technologies Beats Q1 Earnings Estimates, Raises 2026 OutlookZebra Technologies reported first-quarter 2026 adjusted earnings of $4.75 per share, which beat the Zacks Consensus Estimate of $4.21. The bottom line increased 18.2% from $4.02 per share reported in the year-ago quarter.

Total revenues of $1.50 billion surpassed the consensus estimate of $1.47 billion. The top line increased 14.3% year over year, driven by broad-based growth across segments and regions. Consolidated organic net sales increased 4.3% year over year.

Segmental PerformanceEffective from the fourth quarter of 2025, the company started reporting under two segments, namely Connected Frontline and Asset Visibility & Automation.

Revenues from the Connected Frontline segment rose 20.6% year over year to $825 million. Organic net sales increased 3.8%.

The Asset Visibility & Automation segment’s revenues totaled $670 million, up 7.4% year over year. Organic net sales increased 4.8%.

Margin ProfileIn the first quarter of 2026, Zebra Technologies’ cost of sales totaled $753 million, up 13.6% year over year. Total operating expenses increased 17.1% year over year to $527 million.

The company reported net income of $135 million compared with $136 million in the year-ago quarter. Adjusted net income increased to $235 million from $208 million reported in the prior-year quarter.

Zebra Technologies’ Balance Sheet and Cash FlowZebra Technologies had cash and cash equivalents of $114 million at the end of the first quarter compared with $125 million at the end of 2025. Long-term debt totaled $2.39 billion compared with $2.36 billion at the end of 2025.

In the first three months of 2026, Zebra Technologies generated net cash of $176 million in operating activities compared with $178 million in the year-ago period. The company incurred capital expenditure of $13 million in the same time frame. Free cash flow amounted to $163 million compared with $158 million in the prior-year period.

GuidanceFor the second quarter of 2026, Zebra Technologies expects net sales growth in the band of 14-17% year over year. The guidance includes an approximately 10.5 point favorable impact from acquisitions and foreign currency.

Adjusted EBITDA margin is anticipated to be a little higher than 21% in the second quarter. Adjusted earnings per share are expected to be in the band of $4.20-$4.50.

For 2026, it raised its financial outlook. The company now expects adjusted earnings to be $18.30-$18.70 per share compared with $17.70-$18.30 anticipated earlier. Adjusted EBITDA margin is anticipated to be approximately 22% for the year. It currently expects net sales growth of 10-14% year over year. It expects free cash flow to be at least $900 million.

How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended upward during the past month.

VGM ScoresAt this time, Zebra has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Zebra has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Continuing Transition toward a More Asset-Light and Operationally Efficient Business Model Net Revenue of Promotional Products (1) Increased by 70.2% and Gross Profit Rose by 75.0% Year-over-Year Total Marketplace (MP) Service Revenue Increased by 24.7% Year-over-Year Fulfillment Expenses as a Percentage of Revenue Improved by 10 Basis Points Year-over-Year , /PRNewswire/ -- 111, Inc. ("111" or the "Company") (NASDAQ: YI), a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China, today announced its unaudited financial results for the first quarter ended March 31, 2026.

First Quarter 2026 Highlights

Net revenue amounted to RMB2.4 billion (US$342.4 million), representing a 33.1% decrease from RMB3.5 billion in the prior-year quarter. This decline was primarily attributable to the Company's ongoing strategic transition toward a more asset-light and operationally efficient business model. As part of this initiative, the Company divested several underperforming subsidiaries last year and further optimized the fulfillment network through expanded warehouse partnership arrangements, enabling the transition to a warehouse partnership model—where recurring commission income will be generated rather than bearing operational and capital burdens. Meanwhile, total marketplace (MP) service revenue increased by 24.7% year-over-year, demonstrating growth of the Company's marketplace service business and enhanced revenue quality. Net revenue from promotional products amounted to RMB28.9 million, representing 70.2% year-over-year growth, accompanied by a 75.0% increase in gross profit. Furthermore, as of the current quarter, an increasing number of pharmaceutical companies have partnered with 111 to secure general distribution rights for products targeting small and medium-sized chain pharmacies, further strengthening the Company's capabilities in brand building and market penetration. Among such products, "Cravit" has become the flagship offering, with sales growing from 84,000 boxes to 710,000 boxes year-over-year. This performance underscores the Company's distinctive marketing expertise and has generated strong momentum for both upstream suppliers and downstream partners. Fulfillment expenses were RMB61.2 million (US$8.9 million), representing a decrease of 34.6% from RMB93.6 million in the prior-year quarter. As a percentage of net revenue, fulfillment expenses improved to 2.6%, compared with 2.7% in the prior-year quarter, reflecting continued enhancement in operational efficiency and disciplined cost management. (1) Promotional products are the Company's core promoted pharmaceuticals featuring mainstream positioning and high gross margin.

Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, commented, "During the first quarter of 2026, we continued to execute our strategic transition toward a more asset-light and platform-oriented operating model. The 24.7% year-over-year increase in total marketplace (MP) service revenue demonstrates steady progress of the strategic initiative and underscores our pursuit of high-quality, scalable and operationally efficient growth. Through ongoing SKU expansion, deeper collaboration with major third-party online platforms, and enhanced brand partnership strategies, our revenue of B2C business also achieved positive growth in this quarter."

"Our promotional products have rapidly penetrated pharmacies nationwide via the 111 digital marketing platform, with the product lineup continuously expanding. Net revenue and gross profit from these products posted explosive year-over-year growth. Meanwhile, we are committed to securing general distribution rights for more pharmaceutical products like "Cravit" to consolidate market standing and maintain steady performance. This has proven to be a highly profitable and scalable business model, positioning us for sustained growth, and I look forward to sharing further progress and achievements in the coming quarters."

"By optimizing our network and selectively exiting underperforming fulfillment centers, our fulfillment expenses declined by 34.6% year-over-year, outpacing the decrease in revenue. Meanwhile, fulfillment expenses as a percentage of net revenue improved by 10 basis points year-over-year, highlighting our capacity for sustained operational improvement and reflecting our commitment to prudent cost management."

"Looking ahead, we believe these initiatives are gradually reshaping 111 from a transaction-driven pharmaceutical distributor into a more technology-enabled and intelligent healthcare platform business. We will continue to integrate AI-enabled capabilities across multiple operational scenarios, including intelligent demand forecasting, inventory optimization, fulfillment routing and merchant operation management. More importantly, we are deploying AI agent-based solutions in pharmacies and healthcare service scenarios to help customers better manage day-to-day operations. Leveraging a lean, intelligent operating model, we aim to expand margins, lift profitability and deliver long-term value to stakeholders."

First Quarter 2026 Financial Results

Net revenue amounted to RMB2.4 billion (US$342.4 million), representing a decrease of 33.1% from RMB3.5 billion in the same quarter of last year, mainly attributable to the strategic optimization.

Gross segment profit (2) was RMB126.0 million (US$18.3 million), representing a year-over-year decrease of 35.4%.

(In thousands RMB)

For the three months ended March 31,

2025

2026

YoY

B2B Net Revenue

Product

3,457,267

2,282,803

-34.0 %

Service

16,971

21,868

28.9 %

Sub-Total

3,474,238

2,304,671

-33.7 %

Cost of Products Sold (3)

3,288,747

2,186,865

-33.5 %

Segment Profit

185,491

117,806

-36.5 %

Segment Profit %

5.3 %

5.1 %

(In thousands RMB)

For the three months ended March 31,

2025

2026

YoY

B2C Net Revenue

Product

52,312

54,544

4.3 %

Service

2,729

2,369

-13.2 %

Sub-Total

55,041

56,913

3.4 %

Cost of Products Sold

45,437

48,761

7.3 %

Segment Profit

9,604

8,152

-15.1 %

Segment Profit %

17.4 %

14.3 %

(2) Gross segment profit represents net revenue less cost of goods sold.
(3) For segment reporting purposes, purchase rebates are allocated to the B2B segment and B2C segments primarily based on the amount of cost of products sold for each segment. Cost of products sold does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistic staff, logistic centers rental expenses and depreciation expenses, which are recorded in the fulfillment expenses. Cost of service revenue is recorded in the operating expense.

Operating costs and expenses were RMB2.4 billion (US$345.3 million), representing a decrease of 32.5% from RMB3.5 billion in the same quarter of last year.

Cost of products sold was RMB2.2 billion (US$324.1 million), representing a decrease of 32.9% from RMB3.3 billion in the same quarter of last year.
  Fulfillment expenses were RMB61.2 million (US$8.9 million), representing a decrease of 34.6% from RMB93.6 million in the same quarter of last year. As a percentage of net revenue, fulfillment expenses accounted for 2.6% this quarter, down from 2.7% in the same quarter of last year.
  Selling and marketing expenses were RMB58.0 million (US$8.4 million), representing a decrease of 14.6% from RMB67.9 million in the same quarter of last year. Excluding the share-based compensation expenses, selling and marketing expenses as a percentage of net revenue accounted for 2.4% in the quarter as compared to 1.9% in the same quarter of last year.
  General and administrative expenses amounted to RMB12.6 million (US$1.8 million), representing a decrease of 31.1% from RMB18.3 million in the same quarter of last year. Excluding the share-based compensation expenses, general and administrative expenses as a percentage of net revenue accounted for 0.5% this quarter, maintaining the same as last year.
  Technology expenses were RMB14.4 million (US$2.1 million), representing a decrease of 6.9% from RMB15.5 million in the same quarter of last year. Excluding the share-based compensation expenses, technology expenses as a percentage of net revenue accounted for 0.6% in the quarter as compared to 0.4% in the same quarter of last year. Loss from operations was RMB20.0 million (US$2.9 million), compared with income from operations of RMB0.1 million in the same quarter of last year.

Non-GAAP loss from operations (4) was RMB18.8 million (US$2.7 million), compared with non-GAAP income from operations of RMB4.3 million in the same quarter of last year.

Net loss was RMB26.8 million (US$3.9 million), compared with RMB7.3 million in the same quarter of last year. As a percentage of net revenue, net loss accounted for 1.1% this quarter as compared to 0.2% in the same quarter of last year.

Non-GAAP net loss (5) was RMB25.7 million (US$3.7 million), compared with RMB3.2 million in the same quarter of last year. As a percentage of net revenue, non-GAAP net loss accounted for 1.1% this quarter as compared to 0.1% in the same quarter of last year.

Net loss attributable to ordinary shareholders was RMB37.0 million (US$5.4 million), compared with RMB17.6 million in the same quarter of last year. As a percentage of net revenue, net loss attributable to ordinary shareholders accounted for 1.6% this quarter as compared to 0.5% in the same quarter of last year.

Non-GAAP net loss attributable to ordinary shareholders (6) was RMB35.9 million (US$5.2 million), compared with RMB13.5 million in the same quarter of last year. As a percentage of net revenue, non-GAAP net loss attributable to ordinary shareholders accounted for 1.5% this quarter as compared to 0.4% in the same quarter of last year.

(4) Non-GAAP income (loss) from operations represents income (loss) from operations excluding share-based compensation expenses.

(5) Non-GAAP net loss represents net loss excluding share-based compensation expenses, net of tax. Considering the impact of accretion of redeemable non-controlling interest for the first quarter 2026, non-GAAP net loss is used as a meaningful measurement of the operation performance of the Company.

(6) Non-GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax.

As of March 31, 2026, the Company held cash and cash equivalents, restricted cash and short-term investments totaling RMB396.6 million (US$57.5 million), compared to RMB611.3 million as of December 31, 2025. Amount of RMB0.95 billion has been included in the balances of redeemable non-controlling interests and accrued expenses and other current liabilities. This amount is owed to a group of investors of 1 Pharmacy Technology pursuant to equity investments made in 2020, as previously disclosed in the Company's annual report. To date, 111 had repaid approximately RMB282.2 million to all investors in 1 Pharmacy Technology as a result of the holders exercising their redemption rights. Following further discussions, investors representing 60.3% of the total outstanding principal amount have agreed to further restructure the redemption obligation at extended periods, if the holders exercise their redemption rights. For further details on the terms of 111's arrangements with these investors, please see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources" in the Company's annual report for the fiscal year ended December 31, 2025.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP income from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS, as supplemental measures to review and assess its operating performance. The Company defines non-GAAP income from operations as income from operations excluding share-based compensation expenses. The Company defines non-GAAP net income (loss) as net loss excluding share-based compensation expenses, net of tax. The Company defines non-GAAP net loss attributable to ordinary shareholders as net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. The Company defines non-GAAP loss per ADS as net loss attributable to ordinary shareholders per ADS excluding share-based compensation expenses, net of tax per ADS. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.

The Company believes that non-GAAP income from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in income from operations and net loss. Share-based compensation expenses is a non-cash expense that varies from period to period. As a result, management excludes the items from its internal operating forecasts and models. Management believes that the adjustments for share-based compensation expenses provide investors with a reasonable basis to measure the company's core operating performance, in a more meaningful comparison with the performance of other companies. The Company believes that non-GAAP income from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the management in their financial and operational decision-making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, or non-GAAP loss per ADS is that it does not reflect all items of income and expense that affect the Company's operations. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP measures, all of which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.

Reconciliation of the non-GAAP financial measures to the most comparable U.S. GAAP measures is included at the end of this press release.

Exchange Rate Information Statement

This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.8980 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of March 31, 2026.

Forward-Looking Statements

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as 111's strategic and operational plans, contain forward-looking statements. 111 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to the Company's ability comply with extensive and evolving regulatory requirements, its ability to compete effectively in the evolving PRC general health and wellness market, its ability to manage the growth of its business and expansion plans, its ability to achieve or maintain profitability in the future, its ability to control the risks associated with its pharmaceutical retail and wholesale businesses, and the Company's ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and 111 does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

About 111, Inc.

111, Inc. (NASDAQ: YI) ("111" or the "Company") is a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China. The Company provides consumers with better access to pharmaceutical products and healthcare services directly through its online retail pharmacy, 1 Pharmacy, and indirectly through its offline virtual pharmacy network. The Company also offers online healthcare services through its internet hospital, 1 Clinic, which provides consumers with cost-effective and convenient online consultation, electronic prescription service, and patient management service. In addition, the Company's online platform, 1 Medicine, serves as a one-stop shop for pharmacies to source a vast selection of pharmaceutical products. With the largest virtual pharmacy network in China, 111 enables offline pharmacies to better serve their customers with cloud-based services. 111 also provides an omni-channel drug commercialization platform to its strategic partners, which includes services such as digital marketing, patient education, data analytics, and pricing monitoring.

For more information on 111, please visit: http://ir.111.com.cn/.

For more information, please contact:

111, Inc.
Investor Relations
Email: [email protected] 

111, Inc.
Media Relations
Email: [email protected]
Phone: +86-021-2053 6666 (China)

111, Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

As of

As of

December 31, 2025

March 31, 2026

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

510,967

346,203

50,189

Restricted cash

50,337

30,383

4,405

Short-term investments

50,031

20,013

2,901

Accounts receivable, net

259,686

188,963

27,394

Notes receivable

58,617

74,349

10,778

Inventories

998,465

1,016,460

147,356

Prepayments and other current assets

196,756

185,383

26,875

Total current assets

2,124,859

1,861,754

269,898

Property and equipment, net

21,108

21,211

3,075

Intangible assets, net

868

788

114

Other non-current assets

9,285

9,345

1,355

Operating lease right-of-use assets

44,122

41,729

6,049

Total assets

2,200,242

1,934,827

280,491

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT

Current liabilities:

Short-term borrowings

187,631

257,631

37,349

Accounts payable

1,282,368

1,212,511

175,777

Accrued expense and other current liabilities

483,676

248,060

35,961

Total current liabilities

1,953,675

1,718,202

249,087

Long-term operating lease liabilities

29,965

26,310

3,814

Other non-current liabilities

2,181

2,181

316

Total liabilities

1,985,821

1,746,693

253,217

MEZZANINE EQUITY

Redeemable non-controlling interests

935,917

946,924

137,275

SHAREHOLDERS' DEFICIT

Ordinary shares Class A 

34

34

5

Ordinary shares Class B 

25

25

4

Treasury shares 

(5,887)

(5,887)

(853)

Additional paid-in capital

3,181,343

3,182,470

461,361

Accumulated deficit

(3,950,384)

(3,987,425)

(578,055)

Accumulated other comprehensive income

72,635

72,015

10,440

Total shareholders' deficit

(702,234)

(738,768)

(107,098)

Non-controlling interest

(19,262)

(20,022)

(2,903)

Total deficit

(721,496)

(758,790)

(110,001)

Total liabilities, mezzanine equity and deficit

2,200,242

1,934,827

280,491

    111, Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except for share and per share data)

For the three months ended March 31,

2025

2026

RMB

RMB

US$

Net revenues

3,529,279

2,361,584

342,358

Operating costs and expenses:

 Cost of products sold

(3,334,184)

(2,235,626)

(324,098)

 Fulfillment expenses

(93,566)

(61,224)

(8,876)

 Selling and marketing expenses

(67,908)

(58,024)

(8,412)

 General and administrative expenses

(18,341)

(12,636)

(1,832)

 Technology expenses

(15,459)

(14,386)

(2,086)

 Other operating income

324

346

50

Total operating costs and expenses

(3,529,134)

(2,381,550)

(345,254)

Income (Loss) from operations

145

(19,966)

(2,896)

 Interest income

1,254

733

106

 Interest expense

(8,732)

(7,858)

(1,139)

 Foreign exchange gain

42

275

40

 Other income, net

-

21

3

Loss before income taxes

(7,291)

(26,795)

(3,886)

 Income tax expense

(16)

-

-

Net loss

(7,307)

(26,795)

(3,886)

Net loss attributable to non-controlling interest

1,745

761

110

Net loss attributable to redeemable non-controlling interest

445

1,672

242

Adjustment attributable to redeemable non-controlling interest

(12,532)

(12,679)

(1,838)

Net loss attributable to ordinary shareholders

(17,649)

(37,041)

(5,372)

Other comprehensive loss

 Unrealized gains of available-for-sale securities,

-

116

17

 Realized gains of available-for-sale debt securities

-

(134)

(19)

 Foreign currency translation adjustments

(80)

(602)

(87)

Comprehensive loss

(17,729)

(37,661)

(5,461)

Loss per ADS:

 Basic and diluted

(2.00)

(4.20)

(0.60)

Weighted average number of shares used in computation of loss per share

 Basic and diluted

173,119,578

175,898,056

175,898,056

111, Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the three months ended March 31,

2025

2026

RMB

RMB

US$

Net cash provided by (used in) operating activities

112,599

(91,722)

(13,297)

Net cash (used in) provided by investing activities

(1,088)

29,350

4,256

Net cash (used in) provided by financing activities

(72,981)

(122,025)

(17,690)

Effect of exchange rate changes on cash and cash equivalents, and restricted cash

(30)

(321)

(47)

Net increase (decrease) in cash and cash equivalents, and restricted cash

38,500

(184,718)

(26,778)

Cash and cash equivalents, and restricted cash at the beginning of the period

518,332

561,304

81,372

Cash and cash equivalents, and restricted cash at the end of the period

556,832

376,586

54,594

111, Inc.

Unaudited Reconciliation of GAAP and Non-GAAP Results

(In thousands, except for share and per share data)

For the three months ended March 31,

2025

2026

RMB

RMB

US$

Income (loss) from operations

145

(19,966)

(2,896)

Add: Share-based compensation expenses

4,115

1,127

163

Non-GAAP income (loss) from operations

4,260

(18,839)

(2,733)

Net loss

(7,307)

(26,795)

(3,886)

Add: Share-based compensation expenses, net of tax

4,115

1,127

163

Non-GAAP net loss

(3,192)

(25,668)

(3,723)

Net loss attributable to ordinary shareholders

(17,649)

(37,041)

(5,372)

Add: Share-based compensation expenses, net of tax

4,115

1,127

163

Non-GAAP net loss attributable to ordinary shareholders

(13,534)

(35,914)

(5,209)

Loss per ADS (7): Basic and diluted

(2.00)

(4.20)

(0.60)

Add: Share-based compensation expenses per ADS (7), net of tax

0.40

0.20

0.00

Non-GAAP loss per ADS (7)

(1.60)

(4.00)

(0.60)

(7) Every one ADS represents twenty Class A ordinary shares.

SOURCE 111, Inc.

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.

That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.

However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.

Our proprietary system currently recommends YPF Sociedad Anonima (YPF - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.

Studies have shown that stocks with the best growth features consistently outperform the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Here are three of the most important factors that make the stock of this company a great growth pick right now.

Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration.

While the historical EPS growth rate for YPF Sociedad Anonima is 6.9%, investors should actually focus on the projected growth. The company's EPS is expected to grow 439.5% this year, crushing the industry average, which calls for EPS growth of 67.1%.

Impressive Asset Utilization RatioAsset utilization ratio -- also known as sales-to-total-assets (S/TA) ratio -- is often overlooked by investors, but it is an important indicator in growth investing. This metric exhibits how efficiently a firm is utilizing its assets to generate sales.

Right now, YPF Sociedad Anonima has an S/TA ratio of 0.63, which means that the company gets $0.63 in sales for each dollar in assets. Comparing this to the industry average of 0.51, it can be said that the company is more efficient.

While the level of efficiency in generating sales matters a lot, so does the sales growth of a company. And YPF Sociedad Anonima looks attractive from a sales growth perspective as well. The company's sales are expected to grow 18.6% this year versus the industry average of 15.7%.

Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

The current-year earnings estimates for YPF Sociedad Anonima have been revising upward. The Zacks Consensus Estimate for the current year has surged 59.3% over the past month.

Bottom LineYPF Sociedad Anonima has not only earned a Growth Score of A based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This combination indicates that YPF Sociedad Anonima is a potential outperformer and a solid choice for growth investors.

Fracking Halliburton And The Big Bet South Of The Border YPF Sociedad Anónima NYSE: YPF reported higher first-quarter revenue, record first-quarter adjusted EBITDA and sharply improved free cash flow, as executives said the company continued shifting its portfolio toward shale production in Argentina’s Vaca Muerta formation.

Chairman and Chief Executive Officer Horacio Marín said revenue for the first quarter of 2026 totaled $4.95 billion, up 9% from the previous quarter and 7% from a year earlier. He attributed the sequential increase mainly to higher international prices since March and the company’s policy of aligning domestic gasoline and diesel prices with international parity levels. The year-over-year increase reflected stronger local fuel demand and record refinery processing, he said.

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3 Targeted Oil Plays as the Iran Crisis Lifts CrudeAdjusted EBITDA reached nearly $1.6 billion, which Marín described as the highest first-quarter level in YPF’s history. The adjusted EBITDA margin was 32%, while adjusted EBITDA rose 24% sequentially and 28% year over year. Marín said the improvement was driven by higher shale oil production, better pricing dynamics and changes in the upstream cost structure as the company focuses more heavily on shale.

Free Cash Flow and Balance Sheet Improve YPF generated $871 million in free cash flow during the quarter, an improvement of $1.8 billion from a year earlier. Marín said the figure was supported by operating performance and approximately $500 million in proceeds from strategic M&A activity. The company’s net leverage ratio fell to 1.57 times from 1.9 times at the end of the fourth quarter of 2025 and from a peak of 2.1 times in the third quarter of 2025.

Finance Vice President Pedro Kearney said M&A activity contributed a net $504 million to quarterly cash flow, led by about $410 million from the final proceeds of the Profertil divestiture and roughly $85 million from the partial sale of the Manantiales Behr field. Kearney said the Manantiales Behr transaction has a total price of $410 million, with an earn-out of up to $40 million, and that the remaining balance is expected to be collected through 2028.

Kearney said YPF ended March with $1.7 billion in liquidity, up $500 million during the quarter. The company raised nearly $1 billion across international and local markets and bank facilities in the first quarter. That included a $550 million reopening of its 2034 bond at an 8.1% yield, which Kearney said was the lowest international market rate secured by YPF in nine years. The company also issued about $285 million in local U.S. dollar MEP bonds and prepaid approximately $750 million of debt obligations scheduled to mature between 2026 and 2028.

Shale Oil Output Drives Upstream Performance YPF’s shale oil production reached 205,000 barrels per day in the first quarter, up 5% sequentially and 39% year over year. Shale oil represented 76% of total oil production. Marín said the company remains on track for a full-year target of approximately 215,000 barrels per day and a December exit rate of 250,000 barrels per day.

Maximiliano Westen, vice president of strategy, business development and control, said growth in shale oil fully offset continued divestments from conventional fields. Conventional oil production declined more than 45% year over year to 66,000 barrels per day in the first quarter. Upstream lifting costs fell 42% year over year to $8.80 per barrel of oil equivalent, while lifting costs in shale oil hub blocks reached about $4 per BOE. Westen said La Angostura Sur had lifting costs of around $3 per BOE, the lowest among YPF fields.

La Angostura Sur was highlighted as a key growth asset. Marín said the block produced about 2,000 barrels per day of shale oil 18 months ago and is now producing approximately 55,000 barrels per day. He said it is the No. 5 Vaca Muerta block, represents about 25% of YPF’s shale oil production and has a breakeven price below $40 per barrel. YPF owns 100% of the block and is targeting a plateau of about 100,000 barrels per day.

Natural gas production averaged 32.8 million cubic meters per day, down 12% year over year, which Westen attributed mainly to the company’s exit from mature conventional fields, partially offset by shale gas expansion.

Downstream Sets Processing Record as Fuel Pricing Buffer Begins YPF’s refinery processing averaged 344,000 barrels per day in the first quarter, up 3% sequentially and 8% year over year. Westen said this marked another record processing level and supported record production of premium gasoline and middle distillates, allowing YPF to avoid imports, supply local peers and export to neighboring countries.

Domestic gasoline and diesel dispatch volumes declined 3% from the previous quarter due to seasonality but increased 8% from a year earlier. YPF maintained a 57% market share, or 60% when including gasoline and diesel produced by YPF and sold through third-party stations.

Executives also discussed the company’s local fuel pricing strategy. Marín said YPF was able to largely pass through higher international prices in March, but demand began to weaken late in the month, particularly in gasoline. Westen said fuel demand in late March fell by about 10% compared with early March. In response, YPF temporarily postponed further pass-through of international price increases for 45 days beginning in April.

Marín said the decision was made by YPF “without any government interference” and was later adopted by other major industry operators. He said the goal was to protect demand while reaffirming an import-parity strategy in a free-market environment. The company’s midstream and downstream adjusted EBITDA margin was $19.10 per barrel in the first quarter and, based on preliminary April figures, about $24 per barrel.

Infrastructure and LNG Projects Advance YPF said it continued to secure infrastructure needed for Vaca Muerta growth. Westen said VMOS shareholders approved the allocation to YPF of 44,000 barrels per day of additional pipeline capacity, increasing YPF’s stake in VMOS from about 25% to 30%. He also said Oldelval is expected to expand transportation capacity by roughly 150,000 barrels per day by year-end, with YPF holding about 40,000 barrels per day of that incremental capacity.

On the Argentina LNG project, Marín said founding partners YPF, Eni and XRG, the international energy investment arm of ADNOC, are working toward a final investment decision by year-end. The project contemplates total investment of approximately $24 billion, excluding upstream, including financing costs. Marín said market sounding drew interest from about 50 institutional investors, with initial appetite exceeding project financing needs.

For the CESA tolling phase, in which YPF holds a 25% equity stake, Marín said CESA signed an LNG supply partnership with Germany-based SEFE for 2 million tons per year over eight years starting in late 2027. He said the volume represents about 30% of CESA’s total capacity and corresponds to the capacity of the first vessel, Gimi.

During the question-and-answer session, Marín said the Middle East conflict has increased financing appetite for Argentina LNG and may accelerate discussion of future expansion. He also said YPF is seeking more competition among service companies in Vaca Muerta and expects cost improvements, while reiterating that the company’s capital allocation remains focused on unconventional assets.

About YPF Sociedad Anónima NYSE: YPFYPF Sociedad Anónima NYSE: YPF is an integrated oil and gas company headquartered in Buenos Aires, Argentina. The company’s primary businesses encompass upstream exploration and production of crude oil and natural gas, midstream transportation and storage, and downstream refining and distribution. YPF operates several major refineries and a nationwide network of service stations, supplying fuels, lubricants, and petrochemical products to both retail and industrial customers.

Founded in 1922 as Yacimientos Petrolíferos Fiscales, YPF was the world’s first state‐owned oil company.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

Should You Invest $1,000 in YPF Sociedad Anónima Right Now?Before you consider YPF Sociedad Anónima, you'll want to hear this.

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On May 18, 2026, YPF SA YPF shares rose 8.8% today, bringing the current price to $47.48. This price is within a 52-week range, having seen a low of $22.82 and a high of $48.96 over the past year.

GF Value™ verdict: Current price of $47.48 is 5.2% overvalued compared to the GF Value™ of $45.15.GF Score™: 88/100, indicating a strong investment quality.Notable signal: Insider activity shows that insiders sold $0.7M worth of shares in the last 3 months without any buying. Is YPF Overvalued or Undervalued? The current price of YPF SA YPF is $47.48, which is above the GF Value™ estimate of $45.15, suggesting that the stock is overvalued by approximately 5.2%. This overvaluation indicates a lack of margin of safety for potential investors, as purchasing shares at a premium could expose them to greater risk if the market corrects the price to reflect its intrinsic value. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.

The GF Valuation label classifies YPF as fairly valued, indicating that while the stock is above its calculated fair value, it may still be viewed as a viable investment for those willing to accept the risk associated with overvaluation. Investors should consider the potential for volatility and the company's ability to maintain performance in such conditions.

How Does YPF's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 10.4x 10.8x YPF's current forward P/E of 10.4x is slightly below its 5-year median P/E of 10.8x, which suggests that the stock is trading at a lower valuation compared to its historical levels. This P/E analysis aligns with the GF Value™ verdict, indicating a potential overvaluation, although the proximity of current valuations to historical figures suggests that the stock may not be excessively overvalued.

What Does YPF's GF Score™ Tell Us? Metric Rating GF Score™ 88 Financial Strength 5/10 Profitability 7/10 Growth 9/10 Valuation 9/10 Momentum 8/10 The GF Score™ of 88/100 indicates a strong overall quality for YPF. The company excels in growth (9/10) and valuation (9/10), suggesting that it has robust prospects for future earnings and is relatively well-priced compared to its earnings potential. However, financial strength is rated lower at 5/10, indicating some vulnerabilities that may impact its stability. Overall, the combination of high growth potential and strong valuation metrics positions YPF favorably, while areas of financial strength warrant closer scrutiny.

What Are Insiders Doing with YPF Stock? In recent months, insider activity has shown that insiders sold $0.7 million worth of shares, with no recorded purchases. This trend may suggest a lack of confidence among insiders regarding the stock's short-term outlook, as they have chosen to liquidate a portion of their holdings rather than invest further. Such selling activity can be interpreted as a cautionary signal for potential investors.

What This Means for Investors Based on the GF Value™ assessment, YPF is currently overvalued with a price of $47.48 compared to its GF Value™ of $45.15. While the company showcases strong growth and valuation metrics, the insider selling and current overvaluation present risks that investors should consider.

For the complete analysis, visit the YPF SA YPF stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.

Frequently Asked Questions What is YPF's GF Score™?

YPF's GF Score™ is 88/100, indicating a strong investment quality based on various key metrics.

Is YPF overvalued or undervalued?

YPF is currently overvalued, trading at $47.48 compared to a GF Value™ of $45.15, representing a 5.2% premium.

What is YPF's P/E ratio?

YPF's forward P/E is 10.4x, which is below its 5-year median P/E of 10.8x, suggesting the stock is trading at a lower valuation relative to its historical averages.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is YPF Sociedad Anonima (YPF - Free Report) . YPF is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 8.15, while its industry has an average P/E of 10.20. Over the past year, YPF's Forward P/E has been as high as 12.74 and as low as 4.36, with a median of 8.07.

Another valuation metric that we should highlight is YPF's P/B ratio of 0.79. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.90. YPF's P/B has been as high as 1.53 and as low as 0.69, with a median of 1.11, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. YPF has a P/S ratio of 1. This compares to its industry's average P/S of 1.01.

These are just a handful of the figures considered in YPF Sociedad Anonima's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that YPF is an impressive value stock right now.

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.

That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.

However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.

YPF Sociedad Anonima (YPF - Free Report) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank.

Research shows that stocks carrying the best growth features consistently beat the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.

Here are three of the most important factors that make the stock of this company a great growth pick right now.

Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.

While the historical EPS growth rate for YPF Sociedad Anonima is 6.9%, investors should actually focus on the projected growth. The company's EPS is expected to grow 439.5% this year, crushing the industry average, which calls for EPS growth of 67.6%.

Impressive Asset Utilization RatioGrowth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric shows how efficiently a firm is utilizing its assets to generate sales.

Right now, YPF Sociedad Anonima has an S/TA ratio of 0.63, which means that the company gets $0.63 in sales for each dollar in assets. Comparing this to the industry average of 0.51, it can be said that the company is more efficient.

In addition to efficiency in generating sales, sales growth plays an important role. And YPF Sociedad Anonima is well positioned from a sales growth perspective too. The company's sales are expected to grow 18.6% this year versus the industry average of 16.2%.

Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

The current-year earnings estimates for YPF Sociedad Anonima have been revising upward. The Zacks Consensus Estimate for the current year has surged 10.2% over the past month.

Bottom LineYPF Sociedad Anonima has not only earned a Growth Score of A based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This combination indicates that YPF Sociedad Anonima is a potential outperformer and a solid choice for growth investors.

YPF has transitioned from recovery to exponential growth, driven by shale oil production in Vaca Muerta and aggressive cost reductions. YPF's extraction costs dropped 42% y/y to $8.8/boe in Q1 2026, with Vaca Muerta blocks achieving $4.0/boe, matching global leaders. The VMOS export pipeline, launching January 2027, will enable YPF to sell a greater share of output at international prices, materially improving margins.

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

YPF Sociedad Anonima (YPF - Free Report) is a stock many investors are watching right now. YPF is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.15, which compares to its industry's average of 9.85. Over the past year, YPF's Forward P/E has been as high as 12.74 and as low as 4.36, with a median of 8.07.

Investors should also recognize that YPF has a P/B ratio of 0.79. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.85. Within the past 52 weeks, YPF's P/B has been as high as 1.53 and as low as 0.69, with a median of 1.11.

These figures are just a handful of the metrics value investors tend to look at, but they help show that YPF Sociedad Anonima is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, YPF feels like a great value stock at the moment.

The Zacks Retail – Restaurants industry is under pressure from high menu prices and tight consumer budgets, which are weighing on traffic. Rising labor, food and occupancy costs are further squeezing margins. However, the industry is benefiting from steady demand for convenience, growth in digital ordering, ongoing unit expansion and a focus on convenience-led formats. Stocks like Starbucks Corporation (SBUX - Free Report) , Yum China Holdings, Inc. (YUMC - Free Report) and Dutch Bros Inc. (BROS - Free Report) are well-poised to benefit from the factors mentioned above.  

Industry Description The Zacks Retail-Restaurants industry comprises several owners and operators of casual, upscale casual, fine dining, full-service and fast-casual restaurants. Some industry participants operate as roasters, marketers and retailers of specialty coffee. Some companies develop, operate and franchise quick-service restaurants worldwide. A few restaurant operators offer cooked-to-order dishes, including noodles and pasta, soups, salads and appetizers. Some industry players develop, own, operate, manage and license restaurants and lounges worldwide. A few companies also run technology-enabled Japanese restaurants in the United States and provide Japanese cuisine through a revolving sushi service model.

4 Trends Shaping the Future of the Restaurant Industry Challenging Market Landscape: The industry is grappling with a macroeconomic environment marked by persistent inflation and reduced consumer purchasing power. The restaurant industry has been facing declining traffic for quite some time. A rapid increase in menu prices is the primary reason behind traffic erosion. This decline highlights the ongoing challenges that the industry faces in maintaining customer counts, especially as consumers grow frustrated with rising prices.

Intense competition and high wages are concerning. The industry continues to bear increased expenses, which have been affecting margins. Higher pre-opening costs, marketing expenses and costs related to sales-boosting initiatives are exerting pressure on the company’s margins.

U.S. Restaurant Industry Outlook 2026: According to the National Restaurant Association, the U.S. restaurant industry is expected to post steady yet modest growth in 2026, with total sales projected to reach roughly $1.55 trillion. The outlook indicates resilient consumer demand for convenience, off-premise dining and on-the-go options, but the operating environment remains challenging. Elevated labor, food and occupancy costs continue to pressure margins, while price-sensitive consumers are limiting traffic growth. As a result, much of the industry’s expansion is likely to be driven by pricing and average check increases rather than a sharp rebound in customer visits, keeping the overall tone cautiously optimistic.

Convenience Trends and Digital Adoption Support Demand: Consumers are increasingly prioritizing speed and ease, leading to stronger demand for drive-thru, takeaway and delivery services. Restaurants are investing heavily in mobile apps, loyalty programs and AI-powered tools to streamline ordering, reduce wait times and offer personalized promotions. These initiatives not only improve the customer experience but also encourage repeat visits and higher spending, helping brands maintain demand even in a cautious spending environment.

Unit Expansion and Strategic Pricing Drive Sales Growth: Restaurant operators are accelerating expansion through new store openings, smaller formats and entry into untapped markets to capture incremental demand. At the same time, they are using targeted pricing strategies, such as premium menu items, bundled offerings and limited-time deals, to increase average check sizes. This combination of footprint growth and smarter pricing is enabling the industry to sustain revenue growth, even as overall traffic recovery remains gradual.

The Zacks Industry Rank Indicates Dull Prospects The Zacks Restaurant industry is grouped within the broader Retail-Wholesale sector. The industry carries a Zacks Industry Rank #175, which places it in the bottom 28% of more than 244 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

The industry’s position in the bottom 50% of the Zacks-ranked industries results from a negative earnings outlook for the constituent companies in aggregate. Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock-market performance and valuation picture.

Industry Underperforms the S&P 500 and the Sector The Zacks Retail-Restaurants industry has underperformed the Zacks S&P 500 composite and its sector over the past year.

Over this period, the industry has gained 1.2% compared with the Zacks S&P 500 composite’s rise of 37.3%. The sector has increased 21.8%.

1-Year Price PerformanceRestaurant Industry's Valuation Based on the forward 12-month P/E, a commonly used multiple for valuing restaurant stocks, the industry is currently trading at 24.01X compared with the S&P 500’s 21.91X. It is down from the sector’s forward 12-month P/E ratio of 25.05X.

Over the past five years, the industry traded as high as 30.52X and as low as 22.08X, the median being 25.03X.

3 Key Restaurant Picks Starbucks: The company is benefiting from solid international momentum, improved operational discipline and steady progress under its “Back to Starbucks” turnaround strategy. Strength across key global markets such as China, Japan and the United Kingdom, along with advancements in digital platforms and delivery capabilities, is supporting performance. Looking ahead, Starbucks is focused on enhancing efficiency, optimizing the store portfolio and driving menu innovation to reinforce its competitive positioning.

Shares of this Zacks Rank #2 (Buy) company have gained 16.4% in the past six months. SBUX’s fiscal 2026 sales and earnings are anticipated to rise 3.2% and 8.5%, respectively, year over year.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price and Consensus: SBUX

Yum China: The company is gaining from solid growth in systemwide and same-store sales, supported by strong delivery momentum and contributions from new store openings. Continued focus on menu innovation, expansion of the store base and ongoing digital initiatives is expected to further support growth and strengthen Yum China’s market position.

Shares of this Zacks Rank #2 company have gained 8.2% in the past six months. YUMC’s 2026 sales and earnings are anticipated to rise 7.8% and 15.9%, respectively, year over year.

Price and Consensus: YUMC

Dutch Bros: The company is benefiting from robust traffic trends, driven by strong customer loyalty and growing digital engagement. The stock has outperformed the broader industry over the past six months, reflecting solid execution. Dutch Bros continues to expand in a disciplined manner, supported by attractive store-level economics. Meanwhile, ongoing innovation and its expanding food offerings are opening up additional avenues for revenue growth.

Shares of this Zacks Rank #2 company have declined 9.8% in the past six months. BROS’ 2026 sales and earnings are anticipated to rise 24.5% and 18.4%, respectively, year over year.

Price and Consensus: BROS

Wall Street expects a year-over-year increase in earnings on higher revenues when Yum China Holdings (YUMC - Free Report) reports results for the quarter ended March 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 29. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis restaurant operator in China is expected to post quarterly earnings of $0.87 per share in its upcoming report, which represents a year-over-year change of +13%.

Revenues are expected to be $3.25 billion, up 8.9% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Yum China?For Yum China, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.43%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that Yum China will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Yum China would post earnings of $0.35 per share when it actually produced earnings of $0.40, delivering a surprise of +14.29%.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Yum China doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Delivered 10% Revenue Growth and 12% Operating Profit Growth with Record Quarterly Net New Store Openings
OP Margin Expanded Year Over Year for the Eighth Consecutive Quarter
Diluted EPS Up 13%, or 11% Excluding Mark-to-Market and F/X Impact
On Track to Return $1.5 Billion to Shareholders in 2026, Around 9% of Current Market Capitalization

, /PRNewswire/ -- Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the first quarter ended March 31, 2026.

First Quarter Highlights

Total system sales grew 4% year over year ("YoY"), excluding foreign currency translation ("F/X"). Same-store sales reached 100% of the prior year's level. Same-store transactions grew 2% YoY, the 13th consecutive quarter of growth. Total revenues increased 10% YoY to $3.3 billion, or a 4% increase excluding F/X. Opened 636 net new stores, an all-time quarterly high and more than double the openings in the same quarter last year, with 39% opened by franchisees. Total store count reached 18,737 as of March 31, 2026. Operating profit grew 12% YoY to $447 million, a first-quarter record high. Core operating profit grew 6% YoY. OP margin was 13.7%, an increase of 30 basis points YoY, the 8th consecutive quarter of OP margin expansion. Restaurant margin was 18.2%, a decrease of 40 basis points YoY, primarily due to increased rider cost from a higher delivery mix, partially offset by streamlined operations. Diluted EPS increased 13% YoY to $0.87, or up 7% excluding F/X, and up 11% further excluding the impact1 of the mark-to-market equity investments. Returned $316 million to shareholders through $214 million in share repurchases and $102 million in cash dividends. Delivery sales grew 31% YoY. Delivery contributed approximately 54% of total Company sales, up from 42% in the same quarter last year. Active Members of KFC or Pizza Hut, defined as those who transacted in the past 12 months, exceeded 270 million, representing a 9% YoY increase. CEO Comments

Joey Wat, CEO of Yum China, commented, "We delivered solid results in a dynamic environment, and remain encouraged by early signs of improving consumer sentiment. The late timing of Chinese New Year and the extra April spring break affected gathering patterns and same-store sales growth in Q1. However, combined March and April trading has so far been in line with our expectations. In Q1, we accelerated store openings to a record level to capture significant market opportunities. At the same time, we drove system sales growth, operating profit growth and OP margin expansion for the eighth consecutive quarter, thanks to our teams' dedication."

Wat continued, "Importantly, same–store transactions increased for the 13th consecutive quarter for both Yum China and Pizza Hut. KFC achieved positive same–store sales growth for the fourth consecutive quarter and continued to capture new occasions through the rapid rollout of KCOFFEE cafe and KPRO side-by-side modules, and car-side pickup services. Pizza Hut delivered 18% operating profit growth on top of last year's 27% increase and further improved its restaurant and OP margins, while entering more than 100 new cities in Q1, with WOW as the key driver."

Wat concluded, "Looking ahead, we will fuel further growth through front-end segmentation and back-end consolidation. With our strong foundation, dual focus on innovation and operational efficiency, and a more rational delivery platform competition, we are confident in delivering our full-year targets and creating sustainable long–term value for our shareholders."

1 Refers to a 4 cents favorable F/X impact, an unfavorable impact from a mark-to-market loss of 3 cents in the first quarter of 2026 and a mark-to-market gain of 0.4 cent in the first quarter of 2025.

Key Financial Results

First Quarter

%/ppts Change

2026

2025

Reported

Ex F/X

System Sales Growth (2) (%)

4

2

NM

NM

Same-Store Sales Growth (2) (%)

Even

Even

NM

NM

Operating Profit ($mn)

447

399

+12

+6

Adjusted Operating Profit (3) ($mn)

447

399

+12

+6

Core Operating Profit (3) (4) ($mn)

423

399

NM

+6

OP Margin (5) (%)

13.7

13.4

+0.3

+0.2

Core OP Margin (3) (6) (%)

13.6

13.4

NM

+0.2

Net Income ($mn)

309

292

+6

Even

Adjusted Net Income (3) ($mn)

309

292

+6

Even

Diluted Earnings Per Common Share ($)

0.87

0.77

+13

+7

Adjusted Diluted Earnings Per Common Share (3) ($)

0.87

0.77

+13

+7

2 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.

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

4 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.

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

6 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 $1.5 billion each year from 2024 to 2026, which is annually around 9% of our market capitalization as of April 28, 2026. In the first quarter of 2026, the Company returned $316 million in capital to shareholders through $214 million in share repurchases and $102 million in cash dividends. The Company repurchased 4.1 million shares of common stock during the quarter. The Board declared a cash dividend of $0.29 per share on Yum China's common stock, payable on June 17, 2026 to shareholders of record as of the close of business on May 27, 2026. Starting in 2027, the Company plans to return approximately 100% of annual free cash flow after subsidiaries' dividend payments to non-controlling interests. This is anticipated to translate into an average annual return of approximately $900 million to over $1 billion in 2027 and 2028, and to exceed $1 billion in 2028. KFC

First Quarter

%/ppts Change

2026

2025

Reported

Ex F/X

Restaurants

13,454

11,943

+13

NM

System Sales Growth (%)

5

3

NM

NM

Same-Store Sales Growth (%)

1

Even

NM

NM

Total Revenues ($mn)

2,453

2,246

+9

+4

Operating Profit ($mn)

417

386

+8

+3

Core Operating Profit ($mn)

396

386

NM

+3

OP Margin (%)

17.0

17.2

(0.2)

(0.2)

Restaurant Margin (%)

19.1

19.8

(0.7)

(0.7)

System sales for KFC grew 5% YoY. Same-store sales increased 1% YoY, the fourth consecutive quarter of growth. Same-store transactions also grew 1% YoY. Ticket average was 1% lower YoY, driven mainly by the rapid growth of smaller orders, partially offset by increased delivery mix, which carries a relatively higher ticket average. Delivery sales grew 33% YoY, contributing approximately 55% of KFC's Company sales, up from 43% in the same quarter last year. KFC opened 457 net new stores during the quarter, 55% higher than the openings in the same quarter last year, with 172 net new stores opened by franchisees, accounting for 38%. Total store count reached 13,454 as of March 31, 2026. Operating profit increased 8% YoY to $417 million. Core operating profit increased 3% YoY. OP margin was 17.0%, a decrease of 20 basis points YoY. Restaurant margin was 19.1%, a decrease of 70 basis points YoY, primarily due to the impact of increased rider cost resulting from higher delivery mix and value-for-money offerings, partially offset by streamlined operations and favorable commodity prices. Pizza Hut

First Quarter

%/ppts Change

2026

2025

Reported

Ex F/X

Restaurants

4,375

3,769

+16

NM

System Sales Growth (%)

4

2

NM

NM

Same-Store Sales Growth (%)

(1)

Even

NM

NM

Total Revenues ($mn)

635

595

+7

+2

Operating Profit ($mn)

71

60

+18

+12

Core Operating Profit ($mn)

67

60

NM

+12

OP Margin (%)

11.2

10.1

+1.1

+1.0

Restaurant Margin (%)

15.0

14.4

+0.6

+0.6

System sales for Pizza Hut grew 4% YoY. Same-store sales reached 99% of the prior year's level. Same-store transactions grew 5% YoY, the 13th consecutive quarter of growth. Ticket average was 5% lower YoY, consistent with our mass-market strategy and driven mainly by better value-for-money offerings. Delivery sales grew 25% YoY, contributing approximately 51% of Pizza Hut's Company sales, up from 42% in the same quarter last year. Pizza Hut opened 207 net new stores during the quarter, close to half of its full–year 2025 openings, with 105 net new stores opened by franchisees, accounting for 51%. Total store count reached 4,375 as of March 31, 2026. Operating profit grew 18% YoY to $71 million. Core operating profit increased 12% YoY. OP margin was 11.2%, an increase of 110 basis points YoY, the eighth consecutive quarter of OP margin expansion. Restaurant margin was 15.0%, expanding 60 basis points YoY despite a lower ticker average, primarily due to streamlined operations and automation and favorable commodity prices, partially offset by the impact of value-for-money offerings and increased cost associated with higher delivery sales mix. 2026 Outlook

The Company targets:

Total stores of over 20,000, or more than 1,900 net new stores. 40-50% franchise mix of net new stores for both KFC and Pizza Hut. Capital expenditures of approximately $600 million to $700 million. $1.5 billion capital return to shareholders. 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 29, 2026 (7:00 p.m. Beijing/Hong Kong Time on Wednesday, April 29, 2026).

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

To join by phone, please register in advance 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/BI1a0396f7d4794eedbe6ef6771b06b43a

A replay of the webcast will be available two hours after the event and will remain accessible until April 28, 2027. 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 statements under the section titled "2026 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, net new stores, franchise mix of net new stores, capital expenditures, capital returns, dividend and share repurchase plans, CAGR for system sales, operating profit and EPS, earnings, performance and returns, anticipated effects of population and macroeconomic trends, execution of the Company's RGM 3.0 strategy, 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, as well as changes in political, economic and regulatory conditions in China and the U.S., and those set forth under the caption "Risk Factors" in our most recent 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 18,000 restaurants under six brands across over 2,600 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

[email protected]  

Media Contact:

Tel: +86 21 2407 3824

[email protected] 

Yum China Holdings, Inc.

Condensed Consolidated Statements of Income

(in US$ million, except per share data)

(unaudited)

Quarter Ended

% Change

3/31/2026

3/31/2025

B/(W)

Revenues

Company sales

$      3,047

$      2,801

9

Franchise fees and income

30

27

12

Revenues from transactions with franchisees

156

121

28

Other revenues

38

32

18

Total revenues

3,271

2,981

10

Costs and Expenses, Net

Company restaurants

Food and paper

963

874

(10)

Payroll and employee benefits

813

719

(13)

Occupancy and other operating expenses

718

688

(4)

Company restaurant expenses

2,494

2,281

(9)

General and administrative expenses

137

138

—

Franchise expenses

12

11

(13)

Expenses for transactions with franchisees

150

117

(28)

Other operating costs and expenses

31

29

(10)

Closures and impairment expenses, net

—

6

 NM 

Total costs and expenses, net

2,824

2,582

(9)

Operating Profit

447

399

12

Interest income, net

16

26

(44)

Investment (loss) gain

(11)

3

 NM 

Income Before Income Taxes and
  Equity in Net Earnings (Losses) from
  Equity Method Investments

452

428

5

Income tax provision

(123)

(119)

(3)

Equity in net earnings (losses) from
   equity method investments

2

4

(34)

Net income – including noncontrolling interests

331

313

6

Net income – noncontrolling interests

22

21

(4)

Net Income – Yum China Holdings, Inc.

$         309

$         292

6

Effective tax rate

27.2 %

27.8 %

0.6

 ppts. 

Basic Earnings Per Common Share

$        0.88

$        0.78

Weighted-average shares outstanding
    (in millions)

353

376

Diluted Earnings Per Common Share

$        0.87

$        0.77

Weighted-average shares outstanding
    (in millions)

354

378

OP margin

13.7 %

13.4 %

0.3

ppts.

Company sales

100.0 %

100.0 %

Food and paper

31.6

31.2

(0.4)

 ppts. 

Payroll and employee benefits

26.7

25.7

(1.0)

 ppts. 

Occupancy and other operating expenses

23.5

24.5

1.0

 ppts. 

Restaurant margin

18.2 %

18.6 %

(0.4)

 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

3/31/2026

3/31/2025

B/(W)

Revenues

Company sales

$      2,410

$      2,208

9

Franchise fees and income

23

21

17

Revenues from transactions with franchisees

19

16

15

Other revenues

1

1

(2)

Total revenues

2,453

2,246

9

Costs and Expenses, Net

Company restaurants

Food and paper

746

685

(9)

Payroll and employee benefits

643

554

(16)

Occupancy and other operating expenses

560

532

(5)

Company restaurant expenses

1,949

1,771

(10)

General and administrative expenses

61

59

(4)

Franchise expenses

11

10

(14)

Expenses for transactions with franchisees

15

14

(5)

Other operating costs and expenses

—

1

61

Closures and impairment expenses, net

—

5

 NM 

Total costs and expenses, net

2,036

1,860

(9)

Operating Profit

$         417

$         386

8

OP margin

17.0 %

17.2 %

(0.2)

ppts.

Company sales

100.0 %

100.0 %

Food and paper

31.0

31.1

0.1

ppts.

Payroll and employee benefits

26.7

25.1

(1.6)

ppts.

Occupancy and other operating expenses

23.2

24.0

0.8

ppts.

Restaurant margin

19.1 %

19.8 %

(0.7)

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

3/31/2026

3/31/2025

B/(W)

Revenues

Company sales

$         627

$         584

7

Franchise fees and income

3

2

36

Revenues from transactions with franchisees

2

2

36

Other revenues

3

7

(62)

Total revenues

635

595

7

Costs and Expenses, Net

Company restaurants

Food and paper

213

186

(15)

Payroll and employee benefits

168

163

(3)

Occupancy and other operating expenses

152

151

(1)

Company restaurant expenses

533

500

(7)

General and administrative expenses

26

26

—

Franchise expenses

1

1

(31)

Expenses for transactions with franchisees

2

2

(15)

Other operating costs and expenses

2

6

64

Total costs and expenses, net

564

535

(5)

Operating Profit

$           71

$           60

18

OP margin

11.2 %

10.1 %

1.1

ppts.

Company sales

100.0 %

100.0 %

Food and paper

33.9

31.8

(2.1)

ppts.

Payroll and employee benefits

26.7

27.9

1.2

ppts.

Occupancy and other operating expenses

24.4

25.9

1.5

ppts.

Restaurant margin

15.0 %

14.4 %

0.6

ppts.

Percentages may not recompute due to rounding. 

Yum China Holdings, Inc.

Condensed Consolidated Balance Sheets

(in US$ million)

3/31/2026

12/31/2025

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$           473

$            506

Short-term investments

956

878

Accounts receivable, net

103

95

Inventories, net

414

438

Prepaid expenses and other current assets

373

440

Total Current Assets

2,319

2,357

Property, plant and equipment, net

2,570

2,543

Operating lease right-of-use assets

2,175

2,189

Goodwill

1,990

1,963

Intangible assets, net

149

148

Long-term bank deposits and notes

707

678

Equity investments

398

387

Deferred income tax assets

160

156

Other assets

369

362

Total Assets

10,837

10,783

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

Current Liabilities

Accounts payable and other current liabilities

2,126

2,127

Short-term borrowings

20

30

Income taxes payable

158

89

Total Current Liabilities

2,304

2,246

Non-current operating lease liabilities

1,802

1,823

Non-current finance lease liabilities

50

51

Deferred income tax liabilities

412

406

Other liabilities

162

158

Total Liabilities

4,730

4,684

Redeemable Noncontrolling Interest

—

—

Equity

Common stock, $0.01 par value; 1,000 million shares authorized; 351 million shares
      and 355 million shares issued at March 31, 2026 and December 31, 2025, respectively;
      351 million shares and 354 million shares outstanding at March 31, 2026 and December 31,
      2025, respectively.

4

4

Treasury stock

(13)

(28)

Additional paid-in capital

3,752

3,796

Retained earnings

1,788

1,764

Accumulated other comprehensive loss

(98)

(157)

Total Yum China Holdings, Inc. Stockholders' Equity

5,433

5,379

Noncontrolling interests

674

720

Total Equity

6,107

6,099

Total Liabilities, Redeemable Noncontrolling Interest and Equity

$      10,837

$       10,783

Yum China Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in US$ million)

(unaudited)

Quarter Ended

3/31/2026

3/31/2025

Cash Flows – Operating Activities

Net income – including noncontrolling interests

$                   331

$                   313

Depreciation and amortization

117

109

Non-cash operating lease cost

106

99

Closures and impairment expenses

—

6

Investment loss (gain)

11

(3)

Equity in net (earnings) losses from equity method investments

(2)

(4)

Distributions of income received from equity method investments

3

4

Deferred income taxes

(3)

2

Share-based compensation expense

10

9

Changes in accounts receivable

(7)

(2)

Changes in inventories

30

78

Changes in prepaid expenses, other current assets and value-added tax assets

68

25

Changes in accounts payable and other current liabilities

(68)

(179)

Changes in income taxes payable

68

61

Changes in non-current operating lease liabilities

(102)

(101)

Other, net

(12)

35

Net Cash Provided by Operating Activities

550

452

Cash Flows – Investing Activities

Capital spending

(144)

(137)

Purchases of short-term investments, long-term bank deposits and notes

(1,867)

(1,838)

Maturities of short-term investments, long-term bank deposits and notes

1,777

1,916

Acquisition of equity investment

—

(14)

Other, net

1

1

Net Cash Used in Investing Activities

(233)

(72)

Cash Flows – Financing Activities

Proceeds from short-term borrowings

20

—

Repayment of short-term borrowings

(30)

—

Repurchase of shares of common stock

(218)

(173)

Cash dividends paid on common stock

(102)

(90)

Dividends paid to noncontrolling interests

(15)

(13)

Other, net

(8)

(4)

Net Cash Used in Financing Activities

(353)

(280)

Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash

3

2

Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash

(33)

102

Cash, Cash Equivalents, and Restricted Cash - Beginning of Period

506

723

Cash, Cash Equivalents, and Restricted Cash - End of Period

$                   473

$                   825

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

12/31/2025

New Builds

Closures

3/31/2026

Company-owned

11,032

355

(70)

11,317

Franchisees

1,965

182

(10)

2,137

Total

12,997

537

(80)

13,454

Pizza Hut

12/31/2025

New Builds

Closures

3/31/2026

Company-owned

3,830

154

(52)

3,932

Franchisees

338

107

(2)

443

Total

4,168

261

(54)

4,375

Others

12/31/2025

New Builds

Closures

3/31/2026

Company-owned

198

12

(11)

199

Franchisees

738

33

(62)

709

Total

936

45

(73)

908

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

3/31/2026

3/31/2025

Reconciliation of Operating Profit to Adjusted Operating Profit

Operating Profit

$              447

$            399

Special Items, Operating Profit 

—

—

Adjusted Operating Profit

$              447

$            399

Reconciliation of Net Income to Adjusted Net Income

Net Income – Yum China Holdings, Inc.

$              309

$            292

Special Items, Net Income –Yum China Holdings, Inc.

—

—

Adjusted Net Income – Yum China Holdings, Inc.

$              309

$            292

Reconciliation of EPS to Adjusted EPS

Basic Earnings Per Common Share

$             0.88

$           0.78

Special Items, Basic Earnings Per Common Share

—

—

Adjusted Basic Earnings Per Common Share

$             0.88

$           0.78

Diluted Earnings Per Common Share

$             0.87

$           0.77

Special Items, Diluted Earnings Per Common Share

—

—

Adjusted Diluted Earnings Per Common Share

$             0.87

$           0.77

Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate

Effective tax rate

27.2 %

27.8 %

Impact on effective tax rate as a result of Special Items

—

—

Adjusted effective tax rate

27.2 %

27.8 %

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

Quarter Ended

3/31/2026

3/31/2025

Net Income – Yum China Holdings, Inc.

$         309

$         292

Net income – noncontrolling interests

22

21

Equity in net (earnings) losses from equity method investments

(2)

(4)

Income tax provision

123

119

Interest income, net

(16)

(26)

Investment loss (gain)

11

(3)

Operating Profit

447

399

Special Items, Operating Profit

—

—

Adjusted Operating Profit

447

399

Depreciation and amortization

117

109

Store impairment charges

4

6

Adjusted EBITDA

$         568

$         514

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

Quarter ended

% Change

3/31/2026

3/31/2025

B/(W)

Operating Profit

$         447

$         399

12

Special Items, Operating Profit 

—

—

Adjusted Operating Profit

$         447

$         399

12

Items Affecting Comparability

—

—

F/X impact

(24)

—

Core Operating Profit

$         423

$         399

6

Total revenues

3,271

2,981

10

F/X impact

(159)

—

Total revenues, excluding the impact of F/X

$      3,112

$      2,981

4

Core OP margin

13.6 %

13.4 %

0.2

ppts.

Yum China Holdings, Inc.

Segment Results

(in US$ million)

(unaudited)

Quarter Ended 3/31/2026

KFC

Pizza Hut

All Other Segments

Corporate
and
Unallocated(1)

Elimination

Total

Company sales

$      2,410

$         627

$                 10

$                 —

$              —

$      3,047

Franchise fees and income

23

3

4

—

—

30

Revenues from transactions with franchisees(2)

19

2

26

109

—

156

Other revenues

1

3

248

22

(236)

38

Total revenues

$      2,453

$         635

$               288

$               131

$          (236)

$      3,271

Company restaurant expenses

1,949

533

13

—

(1)

2,494

General and administrative expenses

61

26

6

44

—

137

Franchise expenses

11

1

—

—

—

12

Expenses for transactions with franchisees(2)

15

2

25

108

—

150

Other operating costs and expenses

—

2

243

21

(235)

31

Total costs and expenses, net

2,036

564

287

173

(236)

2,824

Operating Profit (Loss)

$         417

$           71

$                   1

$                (42)

$              —

$         447

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

Quarter Ended 3/31/2026

KFC

Pizza Hut

All Other Segments

Corporate
and
Unallocated(1)

Elimination

Total

GAAP Operating Profit (Loss)

$         417

$           71

$                   1

$                (42)

$              —

$         447

Less:

Franchise fees and income

23

3

4

—

—

30

Revenues from transactions with franchisees(2)

19

2

26

109

—

156

Other revenues

1

3

248

22

(236)

38

Add:

General and administrative expenses

61

26

6

44

—

137

Franchise expenses

11

1

—

—

—

12

Expenses for transactions with franchisees(2)

15

2

25

108

—

150

Other operating costs and expenses

—

2

243

21

(235)

31

Restaurant profit (loss)

$         461

$           94

$                  (3)

$                 —

$                1

$         553

Company sales

2,410

627

10

—

—

3,047

Restaurant margin

19.1 %

15.0 %

(14.9) %

N/A

N/A

18.2 %

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

Quarter Ended 3/31/2026

KFC

Pizza Hut

All Other Segments

Corporate
and
Unallocated(1)

Elimination

Total

GAAP Operating Profit (Loss)

$         417

$           71

$                   1

$                (42)

$              —

$         447

Special Items, Operating Profit 

—

—

—

—

—

—

Adjusted Operating Profit (Loss)

$         417

$           71

$                   1

$                (42)

$              —

$         447

Items Affecting Comparability

—

—

—

—

—

—

F/X impact

(21)

(4)

—

1

—

(24)

Core Operating Profit (Loss)

$         396

$           67

$                   1

$                (41)

$              —

$         423

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

—

—

—

—

—

—

Core Operating Profit (Loss)

$         386

$           60

$                  (2)

$                (45)

$              —

$         399

The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated Statements of Income.  

(1) Amounts have not been allocated to any segment for purpose of making operating decision or assessing financial performance as the transactions are deemed corporate revenues and
expenses in nature.

(2) Primarily includes revenues and associated expenses of transactions with franchisees derived from the Company's central procurement model whereby the Company centrally
purchases substantially all food and paper products from suppliers and then sells and delivers to KFC and Pizza Hut restaurants, including franchisees.

SOURCE Yum China Holdings, Inc.

Growth in delivery, loyal customer base expansion and continued store development reinforced confidence in the company's long-term strategy.

• Yum Brands stock is building positive momentum. Why is YUM stock advancing?

Quarterly MetricsThe company reported first-quarter adjusted earnings per share of 87 cents, beating the analyst consensus estimate of 86 cents. Quarterly sales of $3.271 billion (plus 10% year over year) outpaced the Street view of $3.235 billion.

Total system sales grew 4% year over year, excluding foreign currency translation.

“The late timing of Chinese New Year and the extra April spring break affected gathering patterns and same-store sales growth in Q1,” said CEO Joey Wat.

Same-store transactions grew 2% year over year, the 13th consecutive quarter of growth.

Core operating profit grew 6% year over year. Operating margin was 13.7%, an increase of 30 basis points year over year.

Restaurant margin came in at 18.2%, declining 40 basis points year over year. The decrease was driven by higher rider costs from increased delivery mix, partly offset by operational efficiencies.

Delivery sales increased 31% year over year, accounting for about 54% of total company sales, up from 42% a year earlier. Active members of KFC or Pizza Hut surpassed 270 million, marking a 9% increase from the prior year.

As of March 31, the company had cash and equivalents worth $473 million.

DividendThe board declared a cash dividend of 29 cents per share on Yum China’s common stock, payable on June 17, 2026, to shareholders of record as of the close of business on May 27, 2026.

OutlookYum China expects to surpass 20,000 total stores in 2026, with more than 1,900 net new openings. The company aims for a 40%–50% franchise mix for new KFC and Pizza Hut locations.

Capital expenditures are projected to range between $600 million and $700 million. Yum China also plans to return approximately $1.5 billion to shareholders.

YUMC Price Action: Yum China shares are trading higher by 1.95% to $48.29 at publication on Wednesday.

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Yum China Holdings, Inc. (YUMC) Q1 2026 Earnings Call Transcript

Investors with an interest in Retail - Restaurants stocks have likely encountered both Yum China Holdings (YUMC - Free Report) and Dutch Bros (BROS - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Yum China Holdings and Dutch Bros are both sporting a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

YUMC currently has a forward P/E ratio of 16.71, while BROS has a forward P/E of 60.81. We also note that YUMC has a PEG ratio of 1.38. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BROS currently has a PEG ratio of 1.42.

Another notable valuation metric for YUMC is its P/B ratio of 2.89. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BROS has a P/B of 10.14.

These are just a few of the metrics contributing to YUMC's Value grade of B and BROS's Value grade of F.

Both YUMC and BROS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that YUMC is the superior value option right now.

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

#1 (Strong Buy) stocks have produced an unmatched +23.7% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Yum China Holdings (YUMC - Free Report) Yum China Holdings, Inc., incorporated in Delaware on Apr 1, 2016, became an independent and publicly-traded company; post its spin-off from Yum! Brands, Inc. on Oct 31, 2016. Yum China’s U.S. operations are based in Texas. The company operates both company-owned and franchised restaurants.

YUMC is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 15.92; value investors should take notice.

Two analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.01 to $2.95 per share. YUMC also boasts an average earnings surprise of +4%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, YUMC should be on investors' short list.

, /PRNewswire/ -- Yum China Holdings, Inc. (NYSE: YUMC and HKEX: 9987, "Yum China" or the "Company") today announced that the Company has continued to be included in the Dow Jones Best-in-Class World Index (DJBIC World, formerly DJSI World) and the Dow Jones Best-in-Class Emerging Markets Index (DJBIC Emerging Markets, formerly DJSI Emerging Markets) for the sixth consecutive year. Notably, Yum China is the only consumer services company from mainland China to be included in the DJBIC World Index. This achievement underscores the Company's long-standing commitment and leading practices in environmental, social, and governance (ESG).

The Company's inclusion in the DJBIC indices is driven by its strong performance in the S&P Global Corporate Sustainability Assessment (CSA). Yum China achieved a record-high score of 81 in the 2025 S&P Global CSA, ranking first globally in the Restaurants & Leisure Facilities industry for the sixth consecutive year, and was also named to the S&P Global Sustainability Yearbook. Of the 25 CSA evaluation criteria, Yum China ranked in the top 1% in 13 criteria, and achieved the highest score in the industry in 8 criteria, including Sustainable Raw Materials, Labor Practices, Customer Relations, and Privacy Protection, among others.

Furthermore, Yum China's outstanding sustainability performance continues to be recognized by other leading ESG agencies. In March 2026, the Company maintained its AA MSCI ESG Rating for the fifth consecutive year, highlighting its continued leadership within the restaurant industry.

Together, these recognitions reflect Yum China's long-term commitment and continued dedication to sustainability. As Yum China looks ahead, its focus is clear: to grow with purpose, lead with responsibility and create long-term value across its ecosystem. Whether it is safeguarding food safety, empowering its employees, or driving decarbonization across the value chain, the Company strives to strengthen the connection between sustainable development and business performance. This alignment has been and will continue to be a core competitive advantage for Yum China. The Company is confident in its ability to deliver meaningful and lasting impact for its stakeholders and for society.

To learn more about Yum China's ESG efforts,

please visit: https://www.yumchina.com/sustainability/en/home/Index

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. 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 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. 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 captions "Risk Factors" and "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 18,000 restaurants under six brands across over 2,600 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
[email protected]

Media Contact:
Tel: +86 21 2407 3824
[email protected]

SOURCE Yum China Holdings, Inc.

It has been about a month since the last earnings report for Yum China Holdings (YUMC - Free Report) . Shares have lost about 11.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Yum China due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Yum China Q1 Earnings Revenues Meet Estimates, Both Up Y/YYum China reported first-quarter 2026 results, with earnings meeting and revenues surpassing the Zacks Consensus Estimate. On a year-over-year basis, both top and bottom lines increased.

First-quarter results were supported by solid performance at both KFC and Pizza Hut, backed by growth in system sales and same-store transactions. Strong delivery momentum, rapid store expansion and operational efficiencies also aided performance during the quarter.

YUMC’s Q1 Earnings & Revenue DiscussionYum China reported adjusted earnings per share of 87 cents, in line with the Zacks Consensus Estimate. The bottom line increased 13% year over year.

Total revenues of $3.27 billion topped the consensus mark of $3.25 billion by 0.7% and rose 10% from the prior-year quarter.

System sales, excluding foreign currency impacts, increased 4% year over year. Same-store sales matched the prior-year level, while same-store transactions rose 2%, marking the 13th consecutive quarter of growth. Delivery sales jumped 31% year over year and accounted for nearly 54% of total company sales.

Operating Highlights of YUMCTotal costs and expenses increased 9% year over year to $2.82 billion. Restaurant margin declined 40 basis points year over year to 18.2%, mainly due to higher rider costs associated with increased delivery mix, partly offset by streamlined operations.

Operating profit rose 12% year over year to a first-quarter record of $447 million. Operating margin expanded 30 basis points year over year to 13.7%, marking the eighth consecutive quarter of expansion.

Adjusted EBITDA increased to $568 million from $514 million reported in the prior-year quarter.

Yum China also continued to expand aggressively during the quarter. The company opened 636 net new stores, more than double the prior-year level and an all-time quarterly high. Total store count reached 18,737 units as of March 31, 2026.

KFC Performance Aids Yum China ResultsKFC’s revenues increased 9% year over year to $2.45 billion. System sales grew 5%, while same-store sales rose 1%, marking the fourth consecutive quarter of growth.

Delivery sales at KFC climbed 33% year over year and contributed approximately 55% of segment sales, up from 43% in the year-ago quarter.

KFC opened 457 net new stores during the quarter, with franchisees accounting for 38% of openings. Total restaurant count reached 13,454 units.

Operating profit for the segment rose 8% year over year to $417 million. However, operating margin contracted 20 basis points year over year to 17%, while restaurant margin declined 70 basis points to 19.1%, owing to higher delivery-related costs and value-focused offerings.

Pizza Hut Supports YUMC Growth MomentumPizza Hut revenues increased 7% year over year to $635 million. System sales advanced 4%, while same-store transactions grew 5%, marking the 13th straight quarter of transaction growth.

Delivery sales rose 25% year over year and represented approximately 51% of Pizza Hut’s company sales compared with 42% in the prior-year quarter.

The segment opened 207 net new stores during the quarter, with franchisees contributing 51% of the additions. Total Pizza Hut store count reached 4,375 units.

Operating profit surged 18% year over year to $71 million. Operating margin expanded 110 basis points to 11.2%, while restaurant margin improved 60 basis points to 15%, supported by operational efficiencies, automation initiatives and favorable commodity prices.

Yum China’s Balance Sheet & Shareholder ReturnsAs of March 31, 2026, Yum China had cash and cash equivalents of $473 million compared with $506 million at 2025-end. Short-term investments totaled $956 million, while long-term bank deposits and notes were $707 million.

Net cash provided by operating activities increased to $550 million from $452 million reported in the prior-year quarter.

During the quarter, the company returned $316 million to its shareholders through $214 million in share repurchases and $102 million in dividends. Yum China repurchased 4.1 million shares during the period.

The board also declared a quarterly cash dividend of 29 cents per share, payable on June 17, 2026, to shareholders of record as of May 27.

YUMC Reaffirms 2026 OutlookFor 2026, Yum China continues to expect total store count to exceed 20,000 units, with more than 1,900 net new store openings planned.

The company maintained its expectation for capital expenditures between $600 million and $700 million. Yum China also reiterated plans to return $1.5 billion to shareholders in 2026.

Additionally, management highlighted that franchisees are expected to account for 40-50% of net new store openings at both KFC and Pizza Hut, reflecting the company’s ongoing focus on scalable expansion and efficiency.

How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in estimates revision.

VGM ScoresAt this time, Yum China has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Yum China has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

XWELL (NASDAQ: XWEL - Get Free Report) and Avantor (NYSE: AVTR - Get Free Report) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability. Valuation and Earnings This table compares XWELL and Avantor"s top-line

XWELL, Inc. (NASDAQ: XWEL - Get Free Report) was the recipient of a large decrease in short interest in the month of March. As of March 13th, there was short interest totaling 527,181 shares, a decrease of 78.7% from the February 26th total of 2,476,054 shares. Based on an average daily volume of 1,692,311 shares, the

Posted by Defense World Staff on Apr 10th, 2026

XWELL (NASDAQ:XWEL – Get Free Report) and Organon & Co. (NYSE:OGN – Get Free Report) are both small-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.

Volatility & Risk XWELL has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Organon & Co. has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Insider and Institutional Ownership 8.7% of XWELL shares are owned by institutional investors. Comparatively, 77.4% of Organon & Co. shares are owned by institutional investors. 13.9% of XWELL shares are owned by insiders. Comparatively, 2.0% of Organon & Co. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability This table compares XWELL and Organon & Co.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets XWELL -58.17% -352.37% -84.71% Organon & Co. 3.01% 122.01% 6.74% Analyst Recommendations This is a summary of current ratings and recommmendations for XWELL and Organon & Co., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score XWELL 1 0 0 0 1.00 Organon & Co. 5 1 0 1 1.57 Organon & Co. has a consensus target price of $8.50, indicating a potential upside of 22.92%. Given Organon & Co.’s stronger consensus rating and higher possible upside, analysts clearly believe Organon & Co. is more favorable than XWELL.

Valuation & Earnings This table compares XWELL and Organon & Co.”s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio XWELL $29.21 million 0.24 -$16.99 million ($5.11) -0.24 Organon & Co. $6.22 billion 0.29 $187.00 million $0.71 9.74 Organon & Co. has higher revenue and earnings than XWELL. XWELL is trading at a lower price-to-earnings ratio than Organon & Co., indicating that it is currently the more affordable of the two stocks.

Summary Organon & Co. beats XWELL on 12 of the 14 factors compared between the two stocks.

About XWELL (Get Free Report)

XWELL, Inc. provides health and wellness services in airport and off airport marketplaces in the United States and internationally. It operates in four segments: XpresSpa, XpresTest, Naples Wax Center, and Treat. The XpresSpa segment traveler's spa services, including massage, nail, and skin care services, as well as spa and travel products. The XpresTest segment offers diagnostic COVID-19 tests at XpresCheck Wellness Centers in airports, to airport employees and to the traveling public but has transitioned to the CDC's bio-surveillance program; and provides marketing support through HyperPointe business to various health and health-related channels. The Napple Wax Center segment offers skincare and cometic products, as well as face and body waxing services. The Treat segment provides access to wellness services for travelers at on-site centers, consisting of self-guided yoga, meditation, and low impact weight exercises programs. The company offers its services through stores, kiosks, and online. The company was formerly known as XpresSpa Group, Inc. and changed its name to XWELL, Inc. in October 2022. XWELL, Inc. is based in New York, New York.

About Organon & Co. (Get Free Report)

Organon & Co. is a science based global pharmaceutical company, which develops and delivers innovative health solutions through a portfolio of prescription therapies within women’s health, biosimilars and established brands. The company was founded on March 11, 2020, and is headquartered in Jersey City, NJ.

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Posted by Defense World Staff on Apr 26th, 2026

AEGON ASSET MANAGEMENT UK Plc lifted its holdings in shares of Xylem Inc. (NYSE:XYL – Free Report) by 3.6% in the 4th quarter, according to its most recent Form 13F filing with the SEC. The firm owned 432,870 shares of the industrial products company’s stock after buying an additional 15,219 shares during the period. AEGON ASSET MANAGEMENT UK Plc owned approximately 0.18% of Xylem worth $58,931,000 at the end of the most recent quarter.

Several other hedge funds have also made changes to their positions in the business. Vanguard Group Inc. lifted its position in Xylem by 0.5% in the fourth quarter. Vanguard Group Inc. now owns 30,054,743 shares of the industrial products company’s stock valued at $4,092,855,000 after purchasing an additional 152,507 shares during the period. State Street Corp lifted its position in Xylem by 1.2% in the third quarter. State Street Corp now owns 10,953,206 shares of the industrial products company’s stock valued at $1,615,598,000 after purchasing an additional 133,173 shares during the period. Northern Trust Corp lifted its position in Xylem by 1.6% in the third quarter. Northern Trust Corp now owns 3,259,233 shares of the industrial products company’s stock valued at $480,737,000 after purchasing an additional 51,343 shares during the period. Legal & General Group Plc lifted its position in Xylem by 12.2% in the third quarter. Legal & General Group Plc now owns 2,029,272 shares of the industrial products company’s stock valued at $299,318,000 after purchasing an additional 220,246 shares during the period. Finally, Dimensional Fund Advisors LP lifted its position in Xylem by 9.2% in the third quarter. Dimensional Fund Advisors LP now owns 2,019,807 shares of the industrial products company’s stock valued at $297,857,000 after purchasing an additional 169,688 shares during the period. Institutional investors and hedge funds own 87.96% of the company’s stock.

Wall Street Analysts Forecast Growth A number of equities research analysts have recently issued reports on XYL shares. Robert W. Baird set a $161.00 price target on shares of Xylem in a research report on Wednesday, February 11th. Mizuho set a $138.00 price target on shares of Xylem in a research report on Wednesday, February 11th. JPMorgan Chase & Co. reduced their price target on shares of Xylem from $170.00 to $160.00 and set an “overweight” rating for the company in a research report on Thursday, April 16th. Stifel Nicolaus reduced their price target on shares of Xylem from $175.00 to $163.00 and set a “buy” rating for the company in a research report on Tuesday, April 14th. Finally, Oppenheimer reiterated an “outperform” rating and set a $160.00 price target (down from $165.00) on shares of Xylem in a research report on Wednesday, April 1st. Eight investment analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus price target of $153.77.

Get Our Latest Stock Analysis on XYL

Xylem Trading Down 0.1% Shares of XYL opened at $121.56 on Friday. The company has a debt-to-equity ratio of 0.12, a current ratio of 1.62 and a quick ratio of 1.28. The firm has a 50 day simple moving average of $124.09 and a 200-day simple moving average of $135.56. Xylem Inc. has a 1-year low of $114.49 and a 1-year high of $154.27. The stock has a market cap of $29.56 billion, a price-to-earnings ratio of 31.01, a price-to-earnings-growth ratio of 1.75 and a beta of 1.18.

Xylem (NYSE:XYL – Get Free Report) last issued its quarterly earnings data on Tuesday, February 10th. The industrial products company reported $1.42 earnings per share for the quarter, hitting analysts’ consensus estimates of $1.42. Xylem had a net margin of 10.59% and a return on equity of 11.11%. During the same quarter in the previous year, the business posted $1.18 earnings per share. The business’s quarterly revenue was up 6.3% on a year-over-year basis. Xylem has set its FY 2026 guidance at 5.350-5.560 EPS. Equities analysts forecast that Xylem Inc. will post 5.47 EPS for the current fiscal year.

Xylem Increases Dividend The company also recently announced a quarterly dividend, which was paid on Tuesday, March 24th. Shareholders of record on Tuesday, February 24th were paid a $0.43 dividend. This represents a $1.72 annualized dividend and a yield of 1.4%. The ex-dividend date of this dividend was Tuesday, February 24th. This is an increase from Xylem’s previous quarterly dividend of $0.40. Xylem’s dividend payout ratio is presently 43.88%.

Xylem announced that its board has approved a stock buyback program on Wednesday, February 25th that permits the company to repurchase $1.50 billion in shares. This repurchase authorization permits the industrial products company to repurchase up to 4.8% of its shares through open market purchases. Shares repurchase programs are often a sign that the company’s board believes its shares are undervalued.

Xylem Company Profile (Free Report)

Xylem Inc (NYSE: XYL) is a global water technology company that designs, manufactures and services engineered systems and equipment for the transport, treatment, testing and efficient use of water. Its product portfolio spans pumps and pumping systems, valves, filtration and disinfection equipment, sensors and analytical instruments, and digital solutions for monitoring and control of water infrastructure. Xylem serves the full water cycle with offerings for water and wastewater utilities, industrial customers, commercial and residential buildings, and agricultural applications.

The company was established as an independent publicly traded company in 2011 following a corporate spin-off from ITT Corporation and is headquartered in Rye Brook, New York.

See Also Five stocks we like better than Xylem

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CORRECTION...by Xylem Inc.

WASHINGTON--(BUSINESS WIRE)--In the Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic Revenue table, the last column in the fourth row, Measurement and Control Solutions, should read 1% (instead of (1%)).

The updated release reads:

XYLEM REPORTS FIRST QUARTER RESULTS

First-Quarter Highlights

Orders of $2.2 billion, up 3% on a reported basis and flat organically Revenue of $2.1 billion, up 3% on a reported basis and flat organically Earnings per share of $0.79, up 14%; $1.12 on an adjusted basis, up 9% Xylem Inc. (NYSE: XYL), a leading global water solutions company dedicated to solving the world’s most challenging water issues, today reported first-quarter 2026 results. The Company delivered total revenue of $2.1 billion, on strong execution. First-quarter earnings per share were up 14 percent on a reported basis and 9 percent on an adjusted basis.

“We entered the year with sustained momentum and solid demand across key end markets,” said Matthew Pine, Xylem’s CEO. “While the external environment remains dynamic, our teams are executing well, staying close to customers, and advancing long-term priorities.” Pine added, “Our steady progress this quarter demonstrates that our multi-year operating transformation is gaining traction, with disciplined execution and operational rigor.”

Net income attributable to Xylem for the quarter was $193 million, or $0.79 per share. Net income margin increased 90 basis points to 9.1 percent. These results are driven by strong operational performance and a reduction in the estimated loss on sale of businesses, partially offset by increased restructuring and realignment costs. Adjusted net income attributable to Xylem was $272 million, or $1.12 per share, which excludes the loss on sale of businesses, purchase accounting intangible amortization, restructuring and realignment costs, and special charges.

First-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 20.6 percent, reflecting a year-over-year increase of 20 basis points. Productivity savings and strong price realization drove the margin expansion, exceeding the impact of inflation, mix, and lower volumes.

Outlook

Xylem now forecasts full-year 2026 revenue of approximately $9.2 to $9.3 billion, up approximately 2 to 3 percent on a reported basis, versus 1 to 3 percent previously guided, and up approximately 2 to 4 percent on an organic basis, as previously guided.

Full-year 2026 adjusted EBITDA margin is expected to be approximately 22.9 to 23.3 percent, an increase of 70 to 110 basis points from Xylem’s 2025 adjusted results. This results in full-year adjusted earnings per share of $5.35 to $5.60, in line with the previous guidance range. Full-year free cash flow margin is still expected to be approximately 10.2 to 11.0 percent.

Further 2026 planning assumptions are included in Xylem’s first-quarter 2026 earnings materials posted at www.xylem.com/investors. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort.

Supplemental information on Xylem’s first-quarter earnings, as well as definitions of and reconciliations for certain non-GAAP items is posted at www.xylem.com/investors.

About Xylem

Xylem (XYL) is a Fortune 500 global water solutions company that empowers customers and communities to build a more water-secure world. Our 22,000 employees delivered revenue of $9 billion in 2025, optimizing water and resource management with innovation and expertise. Join us at www.xylem.com and Let’s Solve Water.

Xylem uses our Investor Relations website, www.xylem.com/en-us/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media.

Forward-Looking Statements

This press release contains “forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, the words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” "contemplate," "predict," “forecast,” “likely,” “believe,” “target,” “goal,” “objective,” “will,” “could,” “would,” “should,” "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements. By their nature, forward-looking statements address uncertain matters and include any statements that: are not historical, such as statements about our strategy, financial plans, outlook, objectives, plans, intentions or goals (including those related to our social, environmental and other sustainability goals); or address possible or future results of operations or financial performance, including statements relating to orders, revenues, operating margins and earnings per share growth.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include, among others, the following: the impact of overall industry and general economic conditions, including industrial, governmental, and public and private sector spending, interest rates, availability of funding for our customers, inflation and governments’ related monetary policy in response, and the strength of the real estate markets, on economic activity and our operations; geopolitical matters, including nationalism, protectionism and anti-global sentiment, volatility involving the U.S. and other governments, ongoing, escalation or outbreak of international conflicts, and regulatory, trade protection, economic and other risks associated with our global sales and operations; manufacturing and operating cost increases due to macroeconomic conditions, including inflation, energy supply, supply chain shortages, logistics challenges, labor shortages, trade agreements, tariffs, and other trade protection measures, and other factors; demand for our products, disruption, competition or pricing pressures in the markets we serve; cybersecurity incidents, data breaches, or other disruptions of information technology systems on which we or our customers rely, or involving our connected products and services; lack of availability or delays in receiving parts and raw materials from our supply chain, including semiconductors or other key components; operational disruptions at our facilities or that of third parties upon which we rely; safe and compliant treatment and handling of water, wastewater and hazardous materials; failure to successfully execute large projects, including as respects performance guarantees and customers’ budgets, timelines and safety requirements; our ability to retain, compete for and attract leadership, other key talent and labor; defects, security, warranty and liability claims, and recalls related to our products; uncertainty around productivity, simplification, restructuring and realignment actions and related costs and savings; our ability to execute strategic investments for growth, including acquisitions and divestitures; availability, regulation or interference with radio spectrum used by certain of our products; volatility in served markets or impacts on our business and operations due to weather conditions, volatile weather events, or changing climate patterns; risks related to our sustainability efforts and related disclosures; fluctuations in foreign currency exchange rates; difficulty predicting our financial results; risk of future impairments to goodwill and other intangible assets; changes in our effective tax rates or tax expenses; failure to comply with, or changes in, laws or regulations, pertaining to our business conduct, operations, products and services, including anti-corruption, artificial intelligence, data privacy and security, trade, competition, the environment, and health and safety; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; matters related to intellectual property infringement or expiration of rights; and other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).

Forward-looking and other statements in this press release regarding our environmental and other sustainability plans and goals are not an indication that these statements are necessarily material to investors, to our business, operating results, financial condition, outlook, or strategy, to our impacts on sustainability matters or other parties, or are required to be disclosed in our filings with the SEC or other regulatory authorities, and are not intended to create legal rights or obligations. In addition, historical, current, and forward-looking social, environmental and sustainability-related statements may be based on: standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

All forward-looking statements made herein are based on information currently available to us as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

XYLEM INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)

(in millions, except per share data)

  For the three months ended March 31,

2026

2025

Revenue from products

$

1,757

$

1,709

Revenue from services

368

360

Revenue

2,125

2,069

Cost of revenue from products

1,057

1,041

Cost of revenue from services

265

260

Cost of revenue

1,322

1,301

Gross profit

803

768

Selling, general and administrative expenses

472

460

Research and development expenses

56

56

Restructuring and asset impairment charges

31

21

Operating income

244

231

Interest expense

(4

)

(8

)

Other non-operating income, net

—

4

Gain/(Loss) on sale of businesses

4

(10

)

Income before taxes

244

217

Income tax expense

(55

)

(50

)

Net income

$

189

$

167

Net loss attributable to non-controlling interests

4

2

Net income attributable to Xylem

$

193

$

169

Earnings per share:

Basic

$

0.79

$

0.69

Diluted

$

0.79

$

0.69

Weighted average number of shares:

Basic

242.8

243.1

Diluted

243.4

243.8

XYLEM INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions)

  March 31,
2026

December 31,
2025

ASSETS

Current assets:

Cash and cash equivalents

$

808

$

1,479

Receivables, less allowances for discounts, returns and credit losses of $53 and $68 in 2026 and 2025, respectively

1,796

1,759

Inventories

991

983

Prepaid and other current assets

243

244

Assets held for sale

192

176

Total current assets

4,030

4,641

Property, plant and equipment, net

1,151

1,159

Goodwill

8,292

8,332

Other intangible assets, net

2,213

2,272

Other non-current assets

1,268

1,230

Total assets

$

16,954

$

17,634

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

969

$

1,013

Accrued and other current liabilities

1,182

1,237

Short-term borrowings and current maturities of long-term debt

531

534

Liabilities held for sale

73

72

Total current liabilities

2,755

2,856

Long-term debt

1,407

1,408

Accrued post-retirement benefit obligations

308

317

Deferred income tax liabilities

437

405

Other non-current accrued liabilities

818

899

Total liabilities

5,725

5,885

Redeemable non-controlling interest

249

258

Stockholders’ equity:

Common stock – par value $0.01 per share:

Authorized 750.0 shares, issued 260.3 shares and 259.9 shares in 2026 and 2025, respectively

3

3

Capital in excess of par value

8,772

8,759

Retained earnings

3,794

3,706

Treasury stock – at cost 21.2 shares and 16.3 shares in 2026 and 2025, respectively

(1,368

)

(768

)

Accumulated other comprehensive loss

(229

)

(220

)

Total stockholders’ equity

10,972

11,480

Non-controlling interests

8

11

Total equity

10,980

11,491

Total liabilities, redeemable non-controlling interest, and stockholders’ equity

$

16,954

$

17,634

XYLEM INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions)

  For the three months ended March 31,

2026

2025

Operating Activities

Net income

$

189

$

169

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

65

68

Amortization

75

77

Share-based compensation

13

12

Restructuring and asset impairment charges

31

21

(Gain) Loss from sale of businesses

(4

)

10

Other, net

(8

)

11

Payments for restructuring

(37

)

(21

)

Changes in assets and liabilities (net of acquisitions):

Changes in receivables

(58

)

(48

)

Changes in inventories

(18

)

(9

)

Changes in accounts payable

(61

)

(64

)

Changes in long term receivables

(31

)

(32

)

Other, net

(48

)

(161

)

Net Cash – Operating activities

108

33

Investing Activities

Capital expenditures

(90

)

(71

)

Acquisitions of businesses, net of cash acquired

—

(7

)

Proceeds from sale of businesses, net of cash disposed

—

48

Proceeds from the sale of property, plant and equipment

1

5

Cash paid for investments

—

(1

)

Cash paid for asset acquisition

(1

)

—

Cash received from cross-currency swaps

14

12

Other, net

—

(1

)

Net Cash – Investing activities

(76

)

(15

)

Financing Activities

Short-term debt issued, net

—

1

Long-term debt repaid

(4

)

(4

)

Repurchase of common stock

(563

)

(13

)

Proceeds from exercise of employee stock options

—

6

Dividends paid

(106

)

(98

)

Other, net

(10

)

(8

)

Net Cash – Financing activities

(683

)

(116

)

Effect of exchange rate changes on cash

(15

)

25

Increase in cash classified within assets held for sale

(5

)

—

Decrease in cash classified within assets held for sale

—

11

Changes in cash classified within assets held for sale

(5

)

11

Net change in cash and cash equivalents

(671

)

(62

)

Cash and cash equivalents at beginning of year

1,479

1,121

Cash and cash equivalents at end of period

$

808

$

1,059

Supplemental disclosure of cash flow information:

Cash paid during the period for:

Interest

$

11

$

12

Income taxes (net of refunds received)

$

28

$

37

Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic Orders ($ Millions)     (As Reported - GAAP)

(As Adjusted - Organic)

(A)

(B)

(C)

(D)

(E)

(F) = B+C+D+E

(G) = F/(A-D)

Change

% Change

Acquisitions

Divestitures

Change

% Change

Orders

Orders

2026 v. 2025

2026 v. 2025

Book-to-Bill

FX Impact

Adj. 2026 v. 2025

Adj. 2026 v. 2025

2026

2025

Quarter Ended March 31 Xylem Inc. 2,228

2,158

70

3

%

105

%

(12

)

5

(70

)

(7

)

0

%

Water Infrastructure 675

626

49

8

%

112

%

(8

)

5

(32

)

14

2

%

Applied Water 512

486

26

5

%

114

%

-

-

(15

)

11

2

%

Measurement and Control Solutions 475

402

73

18

%

94

%

-

-

(11

)

62

15

%

Water Solutions and Services 566

644

(78

)

(12

%)

100

%

(4

)

-

(12

)

(94

)

(15

%)

Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic Revenue ($ Millions)   (As Reported - GAAP)

(As Adjusted - Organic)

(A)

(B)

(C)

(D)

(E)

(F) = B+C+D+E

(G) = F/(A-D)

Change

% Change

Acquisitions

Divestitures

Change

% Change

Revenue

Revenue

2026 v. 2025

2026 v. 2025

FX Impact

Adj. 2026 v. 2025

Adj. 2026 v. 2025

2026

2025

Quarter Ended March 31 Xylem Inc. 2,125

2,069

56

3

%

(5

)

5

(65

)

(9

)

0

%

Water Infrastructure 603

581

22

4

%

(3

)

5

(29

)

(5

)

(1

%)

Applied Water 448

435

13

3

%

-

-

(14

)

(1

)

0

%

Measurement and Control Solutions 508

490

18

4

%

-

-

(11

)

7

1

%

Water Solutions and Services 566

563

3

1

%

(2

)

-

(11

)

(10

)

(2

%)

Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS ($ Millions, except per share amounts)     Q1 2026 Q1 2025 As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 2,125

-

2,125

2,069

-

2,069

Operating Income 244

98

a

342

231

94

a

325

Operating Margin 11.5

%

16.1

%

11.2

%

15.7

%

Interest Expense (4

)

-

(4

)

(8

)

-

(8

)

Other Non-Operating Income (Expense) -

5

b

5

4

-

4

Gain/(Loss) From Sale of Businesses 4

(4

)

c

-

(10

)

10

c

-

Income before Taxes 244

99

343

217

104

321

Provision for Income Taxes (55

)

(20

)

d

(75

)

(50

)

(22

)

d

(72

)

Net Income 189

79

268

167

82

249

Net Loss Attributable to Non-controlling Interests 4

-

4

2

-

2

Net Income Attributable to Xylem 193

79

272

169

82

251

Diluted Shares 243.4

243.4

243.8

243.8

Diluted EPS $

0.79

$

0.33

$

1.12

$

0.69

$

0.34

$

1.03

    a

Restructuring & realignment costs: 2026 - $38 million; 2025 - $27 million

Special charges: 2026 - $5 million of acquisition, divestiture & integration costs; 2025 - $8 million of acquisition, divestiture & integration costs and $4 million of intangible asset impairment charges

Purchase accounting intangible amortization: 2026 - $55 million; 2025 - $55 million

b

Other special charges

c

Gain/(Loss) from sale of businesses as per income statement for all periods presented

d

2026 - Net tax impact on pre-tax adjustments (notes a, b and c) of $21 million and $1 million of other tax special expense items; 2025 - Net tax impact on pre-tax adjustments (note a and b) of $22 million

Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions)     2026

Q1 Q2 Q3 Q4 Total Net Income attributable to Xylem 193

193

Net Income margin 9.1

%

9.1

%

Depreciation 65

65

Amortization 75

75

Interest Expense (Income), net (4

)

(4

)

Income Tax Expense 55

55

EBITDA 384

384

Share-based Compensation 13

13

Restructuring & Realignment 38

38

Special Charges 10

10

Loss/(Gain) from sale of businesses (4

)

(4

)

Loss attributable to non-controlling interest (4

)

(4

)

Adjusted EBITDA 437

437

Revenue 2,125

2,125

Adjusted EBITDA Margin 20.6

%

20.6

%

    2025

Q1 Q2 Q3 Q4 Total Net Income attributable to Xylem 169

226

227

335

957

Net Income margin 8.2

%

9.8

%

10.0

%

14.0

%

10.6

%

Depreciation 68

69

64

66

267

Amortization 77

76

78

77

308

Interest Expense (Income), net -

3

-

(1

)

2

Income Tax Expense 50

75

71

35

231

EBITDA 364

449

440

512

1,765

Share-based Compensation 12

13

12

16

53

Restructuring & Realignment 27

29

30

45

131

Special Charges 12

13

9

2

36

Loss/(Gain) from sale of businesses 10

-

37

(16

)

31

Loss attributable to non-controlling interest (2

)

(2

)

(1

)

(2

)

(7

)

Adjusted EBITDA 423

502

527

557

2,009

Revenue 2,069

2,301

2,268

2,397

9,035

Adjusted EBITDA Margin 20.4

%

21.8

%

23.2

%

23.2

%

22.2

%

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