Pizza Hut may soon be put up for sale. Pizza Hut parent company Yum Brands said on Tuesday it was launching a formal review of future options for the brand. Currently, Pizza Hut is facing considerable pressure in the highly competitive pizza market.
Chris Turner, CEO of Yum! Brands, said that Pizza Hut has many advantages, including its global business layout and strong growth in multiple countries. Pizza Hut has nearly 20,000 stores in more than 100 countries around the world and its international sales rose 2% in the first nine months of this year. China is its second largest market after the United States.
But nearly half of Pizza Hut's sales come from the U.S. market, where it has about 6,500 stores, where sales fell 7% during the same period. Pizza Hut has long been limited to a large, outdated dine-in restaurant model, at a time when consumers are favoring quick pick-up and delivery services. In 2020, one of Pizza Hut's largest franchisees filed for bankruptcy and closed 300 stores.
"The Pizza Hut team has been working hard to address business and category challenges; however, Pizza Hut's performance demonstrates that we need to take additional steps to help the brand realize its full value, which may be better achieved by separating from Yum Brands. To truly capitalize on the brand we have built and the opportunities ahead, we have decided to initiate a comprehensive evaluation of strategic options," Turner said in a statement.
Yum Brands has not set a deadline for completion of the review and said it would not comment further on the review.
Shares of Yum Brands Inc. were up nearly 7% during Tuesday morning's trading session.