WASHINGTON (dpa-AFX) - As the division struggles to draw in budget-conscious customers and faces increasing pressure in a difficult pizza market, Yum! Brands, Inc. (YUM) announced on Tuesday that it is considering a potential sale of its Pizza Hut chain.
Sales in the US, which makes up roughly 42% of Pizza Hut's worldwide sales, have been dropping for a number of quarters. Despite modest growth in international markets, overall results have been impacted by the weakness in its home market.
Chris Turner, the company's chief executive, acknowledged that the company is examining 'strategic options' for the brand. '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,' Turner said.
Pizza Hut's same-store sales dropped 1 percent in the most recent quarter, lagging behind other Yum! businesses. Despite a more favorable U.S. environment, Taco Bell reported a 7 percent rise in comparable sales, while KFC's saw a three percent increase. Pizza Hut, which has about 20,000 locations worldwide, including 6,500 in the US, accounts for about 11 percent of Yum!'s operating profit.
Rivals like Domino's and Papa John's, who have both increased their market shares through pricing and promotions, have also posed a serious threat to the pizza chain. Yum! did not say when it would make a decision regarding Pizza Hut's future.
The industry's wider problems have been exacerbated by persistent inflation and a cautious consumer spending climate.
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