Pizza Hut Set To Close Up To 500 Dine-In Restaurants.
Pizza Hut is (https://www.today.com/food/pizza-hut-closing-hundreds-its-dine-restaurants-t160225) looking to close as many as 500 stores as the company aims to focus more on delivery and carryout.
"We are leaning in to accelerate the transition of U.S. asset base to truly modern delivery, carryout assets," said David W. Gibbs, president, chief operating officer and chief financial officer for Yum! Brands ((https://finance.yahoo.com/quote/YUM/) YUM ), (https://finance.yahoo.com/news/edited-transcript-yum-earnings-conference-013221518.html) in an earnings call Thursday. "This will ultimately strengthen the Pizza Hut business in the U.S. and set it up for a faster long-term growth."
There are just under 7,500 Pizza Hut locations across the U.S., with Gibbs saying the number could be reduced to 7,000 in the next 24 months. Pizza Hut has 6,100 locations that are traditional restaurants and 1,350 which are express units.
Pizza Hut dine-in locations that have weaker sales numbers will be shut down first.
Gibbs said in an (https://www.restaurantbusinessonline.com/financing/pizza-hut-has-dine-problem) earnings call in 2018 that "the challenge Pizza Hut faces is it has a large dine-in business" and that "the drag dine-in is having on reported same-store sales mask the relative health of delivery and carryout."
"In the U.S., system sales grew 4% with same-store sales growth of 2% and flat unit growth," said Greg Creed, CEO of Yum Brands, in Thursday's earnings call. "We're happy to report that transactions for the quarter grew 3%, which is the result of continued compelling value, ops execution and our growing loyalty program, Hut Rewards."
Creed added that "Pizza Hut International's system sales grew 15% in the quarter."
Pizza Hut's main competitors include Domino's and Papa John's. Delivery companies such as Uber Eats and Doordash have transformed the market, as they have enabled other restaurants to have a delivery service.
(https://www.cnbc.com/2019/07/16/dominos-earnings-2q-2019.html) Domino's has had weak same-store sales due to the delivery services. Papa John's has been trying to revive its sales after its former CEO John Schnatter (https://finance.yahoo.com/news/papa-johns-john-schnatter-will-exit-board-timeline-182840023.html) hurt the company brand with controversial comments.
Pizza Hut has a (https://finance.yahoo.com/news/grubhub-now-power-pizza-hut-204656011.html) partnership with Grubhub to do some of its delivery work.
Louisville, Kentucky-based Yum! Brands also owns KFC, Taco Bell and Wingstreet, and has more (http://investors.yum.com) than 48,000 restaurants in over 145 countries.
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|Publication:||International Business Times - US ed.|
|Date:||Aug 8, 2019|
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