Dive Brief:
- Yum Brands is undertaking a strategic review of its Pizza Hut division that may culminate in a sale of the chain, the company said in a Tuesday announcement.
- The strategic review may not result in a sale, and the company has set no specific timetable for it, according to the announcement.
- Pizza Hut has had a difficult stretch. In the U.S. it has posted seven consecutive quarters of same-store sales declines, including a 6% drop in Q3 2025, according to a Yum earnings release.
Dive Insight:
Pizza Hut has lagged behind its publicly traded competitors, Papa Johns and Domino’s, both of which have seen some quarters of positive same-store sales growth in the U.S. over the past two years. Yum said the strategic review was intended to rectify the chain’s problems.
“Pizza Hut’s performance indicates the need to take additional action to help the brand realize its full value, which may be better executed outside of Yum! Brands,” CEO Chris Turner said in the announcement.
In the company’s earnings release, Yum argued that Pizza Hut has an opportunity to retake leadership of the pizza market because of that segment’s fragmentation and the chain’s “strong brand equity, significant scale, and an experienced global franchise base.”
Both Pizza Hut and KFC U.S. have weighed on Yum’s earnings in recent quarters, but the company’s effort to turn its chicken brand around finally saw some success in Q3, with 2% same-store sales growth in the U.S.
The majority of Pizza Hut’s store system is located outside of the U.S., with 19,872 total global units, according to the Q3 earnings release. According to Yum’s second quarter 10-Q, about 68% of those stores are international, meaning the chain has about 6,350 locations in the U.S. But that is still not enough to insulate the chain from problems in its home market.
In contrast to KFC, which derives 14% of its sales from the U.S. market, Pizza Hut generates 42% of sales in the U.S., according to the Q3 earnings release. This means problems in the U.S. — like a broad consumer pullback from dining or aggressive value promotions and delivery aggregator partnerships by major competitors — can hit Pizza Hut harder than similar problems at KFC. The shortfall in U.S. sales more than offset a 2% bump in international same-store sales at Pizza Hut in the last quarter.
Other restaurant companies have sold off troubled brands this year. Notably, Jack in the Box sold Del Taco to Yadav Enterprises for $115 million last month. Yadav is currently involved in Denny’s move to go private after its own period of sales struggle.
