A sharp slowdown in its biggest market has pushed Yum Brands to review its ownership of Pizza Hut , signalling the fast-food giant may be open to selling the struggling pizza chain, AP reported.
Chief Executive Officer Chris Turner said the company has begun a formal review of strategic options for Pizza Hut, which remains profitable in several global markets but continues to lose ground in the United States.
Pizza Hut operates close to 20,000 restaurants across more than 100 countries, with international sales up 2% in the first nine months of the year. China is its second-largest market after the US. However, in the same period, US sales declined 7%, reflecting the chain’s prolonged struggle to adapt to consumer demand for quick pickup and delivery.
“The Pizza Hut team has been working hard to address business and category challenges; however, Pizza Hut’s performance indicates the need to take additional action to help the brand realise its full value, which may be better executed outside of Yum Brands,” Turner said in a statement.
He added that the decision aims “to truly take advantage of the brand we’ve built and the opportunities ahead,” as Yum initiates a “thorough review of strategic options.”
The company did not set a timeline for completing the review and said no further comments would be made. Shares of Yum Brands rose nearly 7% in morning trading Tuesday.
Chief Executive Officer Chris Turner said the company has begun a formal review of strategic options for Pizza Hut, which remains profitable in several global markets but continues to lose ground in the United States.
Pizza Hut operates close to 20,000 restaurants across more than 100 countries, with international sales up 2% in the first nine months of the year. China is its second-largest market after the US. However, in the same period, US sales declined 7%, reflecting the chain’s prolonged struggle to adapt to consumer demand for quick pickup and delivery.
“The Pizza Hut team has been working hard to address business and category challenges; however, Pizza Hut’s performance indicates the need to take additional action to help the brand realise its full value, which may be better executed outside of Yum Brands,” Turner said in a statement.
He added that the decision aims “to truly take advantage of the brand we’ve built and the opportunities ahead,” as Yum initiates a “thorough review of strategic options.”
The company did not set a timeline for completing the review and said no further comments would be made. Shares of Yum Brands rose nearly 7% in morning trading Tuesday.
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