Pizza Hut, under the ownership of Yum! Brands Inc. (NYSE: YUM), is set to close around 250 of its underperforming restaurants throughout the United States during the first half of 2026. This decision was disclosed during Yum's fiscal 2025 fourth-quarter earnings call, where leadership outlined the initiative as part of a comprehensive strategic review of the pizza chain's operations.
The closures form one element of the 'Hut Forward' program, a targeted set of measures designed to improve the near-term operational and financial performance of Pizza Hut within the United States. CFO Ranjith Roy emphasized that these store closures, while impactful domestically, represent only a minor fraction of Pizza Hut’s extensive global footprint.
This strategic evaluation was initially announced by Yum! Brands in November, with management reiterating that the review process remains ongoing with completion anticipated by the end of the current calendar year. Due to the fluid nature of the analysis, company executives refrained from disclosing specific potential outcomes or decisions that may arise from the evaluation.
Beyond the planned closures, the 'Hut Forward' initiative encompasses several key actions aimed at revitalizing the brand’s positioning in a competitive market. These steps include aligning various stakeholders—ranging from franchisees to corporate teams—behind a more dynamic and targeted marketing plan designed specifically for Pizza Hut’s U.S. operations. Moreover, the program involves the modernization of select technological systems critical to franchise and customer engagement operations. Yum! also anticipates updating certain franchise agreements to enable these changes effectively.
To bolster marketing activities linked to the 'Hut Forward' strategy, Yum! plans a one-time financial contribution aimed at accelerating promotional efforts and brand awareness campaigns.
Overall sales figures for Pizza Hut indicate a slight decline in global same-store sales, with a recorded 1% decrease for both the fourth quarter and the full fiscal year 2025. However, the brand exhibits divergent trends internationally. Specifically, Pizza Hut International continues its growth momentum, posting a 1% increase in same-store sales for the quarter and the full year, driven notably by robust performance in regions such as the Middle East, Latin America, and Asia.
Management forecasts a contraction in Pizza Hut’s unit count during the first half of 2026 in the United States, corresponding to the announced closures. Yet, despite this expected reduction, the company projects a rebound with targeted strong gross unit openings later in the year, consistent with its broader expansion ambitions.
Yum! Brands reaffirmed its long-term operational metrics for Pizza Hut, including a target of 5% unit growth and 7% system sales growth on an annualized basis, excluding the impact of foreign exchange variations. The company also reaffirmed an objective of achieving at least 8% average core operating profit growth over time, underscoring its focus on profitability alongside expansion.
Following the earnings announcement, shares of Yum! Brands experienced a positive movement, recording a 1.82% increase to a price of $162.47 at the last trading check on the reported Thursday.