Yum Brands will review Pizza Hut’s strategic options, including a sale

Yum brands It announced on Tuesday that it would explore strategic options for Pizza Hut.

“The Pizza Hut team is working hard to address business and category challenges; however, Pizza Hut’s performance indicates a need for additional actions to help the brand realize its full value, which may be better implemented outside of Yum! Brands,” Yum CEO Chris Turner said in a statement.

The company did not set a final date or timeline for the review process. While Yum did not specify what the review’s “range of strategic options” entails, possible outcomes could be an outright divestiture, a joint venture, or the sale of a stake in the chain.

“We believe the business could be positioned for greater success in the future,” Turner said on the company’s earnings conference call. “In some markets, there may be a multi-year effort required to reposition it as a leading pizza brand in those markets, and those efforts may be better undertaken under a different structure, perhaps under outside ownership.”

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

Tuesday’s announcement culminates years of fighting for Pizza Hut.

On Tuesday, Yum reported that same-store sales fell 1% during the third quarter, driven by a 6% decline in the domestic market. During the same quarter, Taco Bell and KFC posted same-store sales growth of 7% and 3%, respectively.

Before the pandemic, Pizza Hut had tried to shed its reputation as a go-to place to eat and reposition itself as a pizza delivery and carryout option in the United States. When coronavirus lockdowns shuttered restaurants, the chain saw its sales skyrocket, like the rest of the pizza industry. But once restrictions were eased, so-called pizza fatigue settled in, leading to another decline in sales.

Now, with fewer consumers dining out, Pizza Hut faces increasing competition for a smaller pool of diners. The chain’s share of the pizza market in the United States shrank from 22.6% in 2019 to 18.7% in 2024, causing customers to cede to competitors. Domino’s Pizzaaccording to Barclays.

In the wake of the decline in consumer spending, other restaurant companies have recently divested parts of their businesses in an attempt to improve their balance sheets.

Starbucks It announced Monday that 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 Del Taco has divested Del Taco for $115 million, far less than the $575 million it paid for the chain less than four years ago. and Krispy Kreme It sold its remaining stake in Insomnia Cookies this summer to focus on growing its U.S. business profitably.