Yum Brands to review strategic options for Pizza Hut, including a sale

Yum Brands on Tuesday announced it will explore strategic options for Pizza Hut.

“The Pizza Hut team has been working hard to address business and category challenges; however, 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,” Yum CEO Chris Turner said in a statement.

The company has not set a deadline or definitive timetable for the review process. While Yum did not specify what the review’s “range of strategic options” include, potential outcomes could be an outright divestiture, a joint venture or the sale of a stake in the chain.

“We do think the business can be positioned for even greater success in the future,” Turner said on the company’s earnings conference call. “In some markets, there may be a multi-year effort that is required to reposition it as the leading pizza brand in those markets, and it’s possible that those efforts may best be done under a different structure, potentially under outside ownership.”

Pizza Hut has been a part of a triumvirate with KFC and Taco Bell for decades, dating back to when PepsiCo still owned the fast-food chains. The beverage giant spun off the restaurants in 1997, christening the new company Tricon Global, later renamed to Yum.

Tuesday’s announcement caps years of struggle for Pizza Hut.

On Tuesday, Yum reported that the chain’s same-store sales fell 1% during the third quarter, fueled by a 6% drop in its home market. During the same quarter, Taco Bell and KFC reported same-store sales growth of 7% and 3%, respectively.

Before the pandemic, Pizza Hut tried to shrug off its reputation as a dine-in venue and reposition itself as an option for pizza delivery and carryout in the U.S. When Covid-19 lockdowns shuttered restaurants, the chain saw its sales skyrocket, like the rest of its pizza industry. But once restrictions loosened, so-called pizza fatigue settled in, leading to another sales slump.

And now, with consumers dining out less often, Pizza Hut is facing increased competition for a smaller set of diners. The chain’s share of the U.S. pizza market has shrunk from 22.6% in 2019 to 18.7% in 2024, ceding customers to rival Domino’s Pizza, according to Barclays.

In the wake of the pullback in consumer spending, other restaurant companies have recently shed challenged parts of their businesses in an effort to improve their balance sheets.

Starbucks on Monday announced it is selling a majority stake in its embattled China business and will form a joint venture with Boyu Capital. Last month, Jack in the Box divested Del Taco for $115 million, well short of the $575 million it paid for the chain less than four years ago. And Krispy Kreme sold its remaining stake in Insomnia Cookies this summer to focus on growing its…