Yum! Brands Reviews Pizza Hut Sale Amid Plans to Close 250 U.S. Locations

2026-02-07 companies

Louisville, Friday, 6 February 2026.
Yum! Brands is actively exploring the divestiture of its Pizza Hut division, signaling a major strategic shift to optimize its portfolio. This review coincides with the planned closure of approximately 250 underperforming U.S. restaurants in the first half of 2026 under the “Hut Forward” initiative. The decision follows a challenging 2025, where Pizza Hut saw a 5% decline in domestic same-store sales, weighing down the parent company’s otherwise strong performance driven by Taco Bell and KFC. Notably, Yum! has excluded Pizza Hut from its 2026 growth guidance, suggesting a committed path toward separating the legacy brand to focus on its higher-growth assets.

Domestic Contraction Under ‘Hut Forward’

The planned closure of 250 U.S. restaurants represents a reduction of approximately 3.71% of Pizza Hut’s domestic footprint, based on a reported count of 6,739 locations [3]. This consolidation is part of the “Hut Forward” initiative, designed to prune underperforming assets in a market where the brand has struggled with outdated facilities and fierce competition [1][3]. The financial strain in the U.S. market was evident in 2025, with domestic same-store sales falling 5% and total U.S. system sales declining by 7% [1][3]. This performance contributes to a long-term erosion of market share; Pizza Hut’s slice of the U.S. pizza market has decreased from 22.6% in 2018 to 18.7% in 2023 [3].

Global Performance Divergence

While the domestic sector retracts, international markets have shown relative resilience. International same-store sales grew by 1% in 2025, driven by gains in Asia, the Middle East, and Latin America [1]. However, this international growth was insufficient to counteract the domestic slump, resulting in a global same-store sales decline of 1% for the full year [4]. Consequently, the brand’s global physical presence shrank; Pizza Hut ended 2025 with 19,974 stores worldwide, a net decrease of 251 units from the previous year, as closures outpaced the nearly 1,200 new openings [1].

Strategic Review and Financial Impact

Yum! Brands formally launched its strategic review of the Pizza Hut division in November 2025, with CEO Chris Turner confirming plans to complete the process within 2026 [1]. The review aims to determine whether the brand’s value is best realized within the Yum! portfolio or through a sale, partnership, or divestiture [3]. This strategic assessment has already impacted the balance sheet; the company incurred approximately $41 million in special expenses related to the review during the fiscal year 2025 [6]. Furthermore, the division’s profitability has faced headwinds, with operating profit falling -8.847% year-over-year, dropping from $373 million in 2024 to $340 million in 2025 [6].

Analyst Outlook and ‘Ex-Pizza Hut’ Growth

The potential divestiture has generated optimism among market analysts regarding Yum! Brands’ future valuation. TD Cowen analyst Andrew Charles maintained a “Buy” rating on the stock, suggesting that a separation would streamline the company’s narrative around its stronger growth engines, Taco Bell and KFC [2]. Charles projects that, excluding the impact of the Pizza Hut closures, Yum’s global unit expansion in 2026 will align with its long-term algorithm of approximately 5% [2]. Management has reinforced this perspective by issuing 2026 guidance that is specific to the portfolio “ex-Pizza Hut,” signaling confidence in achieving over 8% core operating profit growth through the remaining brands [5].

Sources

Corporate Strategy Fast Food