Yum Brands, the owner of Taco Bell and KFC, said Tuesday it has begun a strategic review of its Pizza Hut business, signalling that the company could sell all or parts of the pizza chain as it struggles to revive growth.
“The intent is for Pizza Hut to reach its full potential for the benefit of its franchisees, consumers, and employees and to maximize value for Yum! shareholders,” the company said in a statement.
“The review will explore a range of strategic options while Pizza Hut continues to focus on near-term business imperatives.”
Chief Executive Chris Turner, who took charge in October, said the move is aimed at positioning Pizza Hut for sustainable growth, even if that requires resources outside Yum’s ownership.
Sales slide continues despite turnaround efforts
Pizza Hut, once a dominant player in the US pizza market, has faced years of declining sales as competition intensified and consumer preferences shifted toward faster, cheaper delivery options.
According to data from market researcher Technomic, Pizza Hut generated $5.6 billion in US sales last year from about 6,560 stores.
The brand operates roughly 20,000 locations worldwide but has posted eight consecutive quarters of same-store sales declines.
Pizza Hut contributes about 11% of Yum Brands’ operating profit, compared with 38% from Taco Bell’s US operations.
While some of its international markets have performed better, its US business continues to weigh on overall results, accounting for roughly 42% of total sales.
Last month, Pizza Hut’s UK franchise operator DC London Pie went into administration, forcing the closure of 68 restaurants and threatening 1,200 jobs.
Yum later bought back the remaining UK operations in a pre-pack deal that saved 64 outlets and secured 1,277 jobs.
Industry faces consolidation amid tough consumer environment
Yum’s announcement comes as several restaurant chains consider mergers or buyouts amid softening demand and tighter consumer budgets.
Denny’s agreed this week to be taken private in a $322 million deal, while Apollo Global Management reportedly renewed its bid for Papa John’s.
Bojangles has also hired bankers to explore a sale.
Even Domino’s Pizza, the industry leader, has leaned on aggressive promotions and delivery tie-ups with Doordash and UberEats to maintain growth despite slower traffic.
In contrast, Pizza Hut has struggled to communicate a strong value message.
Former Yum CEO David Gibbs said in August that although the brand had launched $5 and $2 value deals, “an insufficient value message amid a competitive value landscape resulted in transaction softness.”
No deadline for review completion
Yum Brands emphasized that there is no fixed timeline for completing the strategic review and no guarantee it will lead to a sale or restructuring.
The company noted that Pizza Hut’s management remains focused on improving near-term performance while the process is underway.
Yum’s consideration of a sale marks a potential turning point for the chain that PepsiCo first acquired in 1977 before spinning it off, along with KFC and Taco Bell, into a new restaurant company in 1997—eventually renamed Yum Brands in 2002.
The review underscores the mounting pressure on global restaurant operators to streamline portfolios and adapt to shifting consumer habits in a period of persistent inflation and changing dining trends.
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