300 Pizza Hut restaurants to shut
As many as 300 Pizza Hut restaurants, most of them dine-in locations, will be closed. The decision, part of a deal between Yum Brands chain and its largest US franchisee NPC International, comes as millions of people are sheltering and eating at home.
NPC will put its remaining 927 Pizza Hut locations up for sale. Earlier in July, the franchisee, which also operates nearly 400 Wendy's restaurants, filed for Chapter 11 bankruptcy protection after struggling with its debt burden of roughly $1 billion.
Pizza sales have exploded during the pandemic. Last month, Domino's reported a 30% spike in quarterly profits. On Monday, it said that said that it was hiring more than 20,000 people to handle surging orders.
"In the event NPC executes a sale of its Pizza Hut business, Pizza Hut's focus would be to ensure that new ownership brings to NPC's Pizza Hut restaurants a strong capital structure, healthy balance sheet, commitment to operational excellence, and a growth mindset," a Pizza Hut spokesperson said in a statement to CNBC.
NP owns 1,225 Pizza Huts and 385 Wendy's restaurants in 27 states, There are 6,700 Pizza Hut restaurants in the US.
In its filing, NPC said that closing stores not designed for pick-up or delivery will allow it to invest in smaller stores that can better handle online orders.
In May, Pizza Hut’s US carryout and delivery sales reached an eight-year high, according to Yum Brands Inc., the Louisville, Kentucky, company that also owns KFC and Taco Bell.
But Pizza Hut’s US sales grew just 1% in the April-June period; rival Domino’s Pizza, which has smaller, carryout-focused stores, posted a 20% jump in US sales.
Yum Brands in a prepared statement said the stores being closed had underperformed others owned by NPC, and that shedding them would strengthen NPC’s remaining portfolio.
(With AP inputs)