Yum China HoldingsYUMC +0.12%81 Operating Margin % is 13.67% as of Mar. 2026, which is 39% above its 10-year median of 9.82. GuruFocus rates YUMC with a GF Score™ of 81/100 and a GF Value™ of $53.83 (Modestly Undervalued). Among 365 Restaurants companies, Yum China Holdings ranks better than 82.47% on this metric.
Yum China Holdings (NYSE:YUMC) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Yum China Holdings Operating Margin % Related Terms
Yum China Holdings Operating Margin % Historical Data
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The historical data trend for Yum China Holdings's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
YUMC vs TXRH, DPZ, LKNCY: Operating Margin % Comparison
For the Restaurants subindustry, Yum China Holdings's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Yum China Holdings Operating Margin % vs Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Yum China Holdings's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Yum China Holdings's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Yum China Holdings's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Yum China Holdings (YUMC) has a Operating Margin % of 13.67% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Yum China Holdings and its competitors. This is 39% above median its historical median of 9.82. Over the past decade, Yum China Holdings' Operating Margin % has ranged from 6.88 to 11.32. According to the industry distribution chart, Yum China Holdings ranks #64 out of 365 companies in the Restaurants industry, placing it in the top 17.5%.
Is Yum China Holdings' Operating Margin % too high?
Yum China Holdings' current Operating Margin % of 13.67% is 39% above median its 10-year median of 9.82. Over the past 10 years, this metric has ranged from a low of 6.88 to a high of 11.32. The Restaurants industry median Operating Margin % is 4.26. Yum China Holdings' value of 13.67% is 220.9% above this industry median. Based on the distribution chart, Yum China Holdings ranks #64 out of 365 companies in the Restaurants industry, which is in the top quartile — a strong position relative to peers. Overall, Yum China Holdings has a GF Score™ of 81/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Yum China Holdings' Operating Margin % compare to TXRH and DPZ?
According to the Restaurants industry distribution chart, Yum China Holdings ranks #64 out of 365 companies for Operating Margin %. This places Yum China Holdings in the top 18% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 4.26. Yum China Holdings' value of 13.67% is 220.9% above this benchmark. Historically, Yum China Holdings' own Operating Margin % has ranged from 6.88 to 11.32 over the past decade. While the company's 10-year median is 9.82 vs. the industry median of 4.26, Yum China Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Restaurants company?
The median Operating Margin % among Restaurants companies is 4.26, based on 365 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Yum China Holdings's current Operating Margin % of 13.67% is 220.9% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Yum China Holdings and its competitors. For the Restaurants industry, the median Operating Margin % is 4.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Yum China Holdings's current Operating Margin % is 13.67%, which is 39% above median its own 10-year median of 9.82. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Yum China Holdings stock overvalued right now?
Based on GuruFocus' analysis, Yum China Holdings (YUMC) is currently considered Modestly Undervalued. The stock's GF Value™ is $53.83, compared to a current price of $41.01 — trading 23.8% below its estimated fair value. The current Operating Margin % is 13.67%, which is 39% above median its 10-year median of 9.82 and 220.9% above the Restaurants industry median of 4.26. Yum China Holdings' overall GF Score™ is 81/100. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Yum China Holdings (YUMC), the current Operating Margin % is 13.67% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Yum China Holdings (YUMC) Overvalued in 2026?
Based on GuruFocus' analysis, Yum China Holdings stock appears to be undervalued.
The current stock price of $41.01 is trading 23.8% below its estimated GF Value™ of $53.83.
GuruFocus considers Yum China Holdings to be Modestly Undervalued.
Key valuation signals for YUMC:
Operating Margin %: 13.67% (39% above median its 10-year median of 9.82)
GF Value™: $53.83 vs. price of $41.01 (23.8% below fair value)
Industry Position: 220.9% above the Restaurants median (#64 of 365)
No single metric tells the full story. See the YUMC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Yum China is the largest restaurant operator in China, with over 18,000 locations and USD 12 billion in systemwide sales as of 2025. It generates revenue primarily from its own restaurants and franchise fees. While KFC and Pizza Hut are its flagship brands, Yum China's portfolio also includes Little Sheep, Taco Bell, Huang Ji Huang, and Lavazza.As a trademark licensee of Yum Brands, Yum China pays 3% of KFC and Pizza Hut's systemwide sales to its former parent, from which it spun off in 2016. However, even before the separation, Yum China was granted substantial autonomy, giving its Chinese leadership decision-making authority over menu, supply chain, and marketing—an unusual practice for Western chains at the time.
81GF Score
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