Earlier this year, Yum! Brands shared that it was considering selling the Pizza Hut brand while also sharing plans to close around 250 underperforming restaurants.

The company shared in its third-quarter earnings call that Taco Bell and KFC account for around 90% of its operating profits. That essentially makes Pizza Hut a drag on Yum Brands that may not be worth management’s time.

Because of that, the company has begun a strategic review, which could end up in its selling Pizza Hut.

“The intent is for Pizza Hut to reach its full potential for the benefit of its franchisees, consumers, and employees, and to maximize value for Yum! shareholders. The review will explore a range of strategic options while Pizza Hut continues to focus on near-term business imperatives,” the company shared in a press release.

Also Read: Pizza Hut closing 100s of restaurants nationwide

Now, rival chain Papa John’s has reported fourth-quarter earnings and has shared plans to close around 300 underperforming locations.

Papa John’s has struggled

The current economic downtrend has hurt pizza chains as consumers have been trading down. That’s behaviour that executives from chains including McDonald’s and Walmart have noted.

“While foodservice remains dominant with nearly two-thirds ordering carryout monthly, delivery has declined from 61% in 2022 to 55% in 2025, according to the 2025 Technomic Pizza Consumer Trend Report. The most telling shift: 25% of consumers report eating more frozen pizza instead of restaurant options due to price increases,” Baking Business shared.

The impact of that has been felt by Papa John’s, which reported flat revenue and a decline in U.S. same-store sales.

Papa John’s full-year sales:

  • Global system-wide restaurant sales were $4.92 billion, a 1% increase compared with the prior year.
  • North America comparable sales decreased 2% as domestic company-owned restaurants were down 3% and North America franchised restaurants were down 2%.
  • International comparable sales increased 5%.
  • Opened 279 new restaurants in fiscal year 2025, comprised of 96 restaurant openings in North America and 183 restaurant openings in International markets.
  • Total revenues of $2.1 billion were flat compared with the prior year. Net income was $32 million compared with $84 million in 2024.
    Source: Papa John’s investor relations

CEO Todd Penegor tried to frame the results in a positive light.

“We are encouraged by the progress we are making in our transformation as we further reinforce our brand health, sharpen our value proposition, build our innovation pipeline and enhance the customer experience. These actions, alongside recent changes to our organizational structure to drive efficiencies, provide a strong foundation for our future,” he said in the earnings release.

Papa John’s and Pizza Hut have seen their U.S. sales drop.

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Papa John’s closing around 300 locations

During its fourth-quarter earnings call, Papa John’s CFO Ravi Thanawala shared part of the chain’s plan to return to U.S. same-store sales growth.

“We have completed a strategic review of our restaurant fleet and identified targeted opportunities to strengthen it through select closures. The vast majority of our global restaurants have performed well over the years and delivered strong returns for both corporate and franchise owners,” he said.

Some locations, however, have not.

“We have identified approximately 300 underperforming restaurants across North America that are not meeting brand expectations or lack a clear path to sustainable financial improvement, as well as locations where we can effectively transfer sales to a nearby restaurant,” he said.

The impacted restaurants are primarily franchise-owned and are mostly operating at negative four-wall EBITDA.

“We expect to close the majority of these restaurants by the end of 2027, with approximately 200 closures occurring in 2026. We believe these closures will further strengthen the system. This is the same strategy we successfully deployed during my tenure managing our international business,” he added.

The closing stores generally do less than $600,000 in annual revenue.

Papa John’s will also cut 7% of its corporate workforce.

Domino’s leads the pizza space

Domino’s has carved out the perfect position in this marketplace by pushing price and affordability, matched with convenience.

While Pizza Hut and Papa John’s have been struggling, Domino’s has posted strong growth numbers.

  • Global retail sales growth (excluding foreign currency impact) of 4.9% for the fourth quarter; 5.4% growth for fiscal 2025.
  • U.S. same-store sales growth of 3.7% for the fourth quarter; 3.0% growth for fiscal 2025.
  • International same-store sales growth (excluding foreign currency impact) of 0.7% for the fourth quarter; 1.9% growth for fiscal 2025.
  • Global net store growth of 392 for the fourth quarter; global net store growth of 776 for fiscal 2025.
  • Income from operations increased 8.0% for the fourth quarter; 8.5% for fiscal 2025.
    Source: Domino’s fourth-quarter earnings release

“In today’s value-conscious environment, the restaurants seeing success are those offering standout products and experiences across multiple dimensions,” Bank of America Securities analyst Sara Senatore told Sahm Capital.

She noted that Domino’s has positioned itself for growth.

“This consistent execution has allowed leading quick-service pizza chains to expand market share, and she highlights that Domino’s Pizza is positioned to continue outperforming, backed by its partnerships with delivery platforms like DoorDash,” she added.

Domino’s has also been helped by its lead in technology over Pizza Hut and Papa John’s.

“Digital channels represented over 85 % of U.S. retail sales in 2024, highlighting digital dominance,” according to data from CB Insights.

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