Pizza Hut is set to close 250 restaurants across the United States as part of a broader strategy to enhance its marketing and technology initiatives amid a strategic review by its parent company, Yum Brands. CEO Chris Turner confirmed that this review, which may culminate in a potential sale of the Pizza Hut brand, is proceeding on schedule, with completion expected later this year.
During the company’s fourth-quarter earnings call, CFO Ranjith Roy outlined the “Hut Forward” agreement with various stakeholders, aimed at revitalizing the brand. The initiative focuses on implementing a more dynamic marketing strategy, updating technology, and revising franchise agreements to push for immediate sales growth while facilitating long-term improvements.
Despite these efforts, Pizza Hut has faced ongoing challenges with consistent revenue generation. The chain reported a 3% decline in same-store sales during the fourth quarter, marking its ninth consecutive drop and contributing to a troubling trend of stagnant or negative sales performance over the past two and a half years. In total, same-store sales have fallen in 12 out of the last 16 quarters.
With its unit sales trailing behind competitors such as Domino’s, Little Caesars, and Papa John’s—approximately $200,000 less annually—Pizza Hut’s position in an already saturated pizza market is increasingly precarious. Last year alone, the brand’s U.S. system sales fell by 7%, including a 5% decline in same-store sales that resulted in the closure of around 130 locations.
Turner emphasized that the steps being taken are crucial as the company conducts its strategic review. He stated, “We are taking focused, short-term actions on Pizza Hut, focused on the execution of the strategic review,” underscoring the belief that these measures are necessary for the brand’s recovery.
The situation reflects a significant phase in Pizza Hut’s evolution as it seeks to adapt to market demands and revitalize its brand presence. While the closures represent immediate challenges, they may ultimately pave the way for a more sustainable business model in the future.