Yum Brands has seen KFC and Taco Bell as emerging winners, which have been able to gain traffic as efforts to offer value meals and coming out with new menu options have helped pull in customers.
- On Wednesday, Yum Brands said it would close 250 underperforming Pizza Hut units in the first half of 2026.
- The company expects Pizza Hut's first-quarter core operating profit to be down nearly 15%.
- According to Placer.ai, overall visits to Taco Bell rose 3% in December, and KFC’s visits fell 1.6%, while visits to Pizza Hut declined 3.2%.
Yum Brands' results failed to excite investors and retail traders, but focus has turned to the restaurant chain’s efforts to fend off its Pizza Hut chain, which has underperformed KFC and Taco Bell.
On Wednesday, Yum Brands said it would close 250 underperforming Pizza Hut units in the first half of 2026. This is on the heels of the company initiating a formal review of strategic options for the Pizza Hut brand in November.
Pizza Hut Closure
“To help set expectations on key Pizza Hut business metrics for 2026, from a unit standpoint, we expect strong gross openings globally, which are seasonally in the back half of the year,” CFO Ranjith Roy said.
“In the first half, in the U.S., we expect approximately 250 targeted closures of underperforming units tied to the Hut Forward program, which will result in a decline in global Pizza Hut units in the first half,” he added.
The company expects Pizza Hut's first-quarter core operating profit to be down nearly 15%, driven by one-time marketing support investments that will be recorded in franchise and property expenses.
The Crown Jewels Of Yum
Pizza Hut has struggled over the past several quarters to keep up with competitors and drive demand as the overall restaurant category faces a consumer slowdown. However, as winners, KFC and Taco Bell have gained traffic through value meals and new menu options, helping attract customers.
The company has opened new KFC and Taco Bell outlets, with more planned for the year. Taco Bell's same-store sales increased 7% during the first quarter, and KFC’s same-store sales rose 3% while Pizza Hut’s sales dipped 1%.
According to Placer.ai, overall visits to Taco Bell rose 3% in December, and KFC’s visits fell 1.6%, while visits to Pizza Hut declined 3.2%. However, Taco Bell continues to stand out as the portfolio’s primary growth driver, with its promotional strategy and menu innovation serving as a model for the broader system and the quick-service restaurants space.
How Are Stocktwits Users Reacting?
Retail sentiment on Yum Brands was in the ‘bullish’ territory compared to ‘extremely bearish’ a week ago, with message volumes at ‘high’ levels, according to data from Stocktwits.
A user on Stocktwits said that KFC's international strength and Taco Bell's U.S. dominance are pillars.
Shares of Yum Brands gained nearly 11% in the last 12 months.
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