Pizza Hut is set to shutter hundreds of its locations across the United States in the first half of 2026, as its parent company Yum! Brands undertakes a comprehensive strategic assessment to tackle the brand's persistent difficulties in a highly competitive market.
Strategic Closures Amid Ongoing Review
During Wednesday's earnings call, Yum! Brands—which also owns Taco Bell and KFC—revealed plans to close 250 'underperforming' Pizza Hut restaurants in the United States during the initial six months of 2026. This move represents approximately 3% of the chain's total US footprint, according to CNN reports. The announcement follows Yum! Brands' November disclosure that it had initiated a formal review of strategic options for Pizza Hut, including the potential for a sale.
On Wednesday, the company provided no additional specifics regarding the review, merely noting that it is anticipated to conclude later this year. The report highlighted that Pizza Hut continues to grapple with challenges in an increasingly cutthroat pizza market, where it notably lags behind its primary competitor, Domino's.
Financial Performance and Market Challenges
The chain reportedly experienced another disappointing quarter, with US same-store sales declining by 3%. Efforts to attract customers through value-oriented offerings, such as a new $5 pizza, have thus far failed to gain significant traction among consumers.
Chief Financial Officer Ranjith Roy, speaking during Yum! Brands' February 4 earnings call as reported by USA Today, explained that the decision to close locations is integral to the company's 'Hut Forward' strategy. This approach emphasizes vibrant marketing, technological modernization, and franchise agreements.
Roy stressed that the 250 locations earmarked for closure constitute only a small fraction of Pizza Hut's global network of roughly 20,000 restaurants. He added that these closures align with what the company believes is the optimal path forward as it continues its strategic review.
Franchise Partnerships and Broader Brand Performance
In an emailed statement to Restaurant Business Online, Yum! Brands stated, 'While we don't share specific details of franchise agreements, we are pleased to be working in partnership with our franchisees on increased efforts to deliver near-term sales while advancing long-term strategy.'
Meanwhile, Taco Bell emerged as a bright spot for Yum! Brands, posting a 7% increase in same-store sales for the quarter. A consistent flow of new menu items has reportedly helped the brand attract a diverse range of customers, from high-income diners to younger consumers and families.
KFC also demonstrated signs of progress in the US, with same-store sales rising by 1% as the brand continues its gradual turnaround. The chain has enlisted executives from Taco Bell to bolster menu innovation, aiming to compete more effectively with rivals such as Raising Cane's and Chick-fil-A.
Shares of Yum! Brands have risen by 6% so far this year, reflecting investor confidence amid these strategic adjustments.
