While Yum! Brands recorded overall strong growth for the first quarter ended 31 March 2026, driven by Taco Bell and KFC, Pizza Hut witnessed stagnant sales and dwindling profits. The brand’s operating profit fell 14%, while operating margin took a sharp dip from 32.3% to 25.4%.
The restaurant chain is now set to be sold for a total of $2.7 billion (subject to certain purchase price adjustments) through multiple agreements.
Pizza Hut Ex-China sale
Pizza Hut will be purchased by LongRange Capital (excluding Mainland Chain) for approximately $1.5 billion. Additionally, Yum! has the opportunity to receive an earn-out of $75 million by 2030.
Yum! Brands will continue to provide its proprietary technology platform Byte to Pizza Hut Ex-China. On a temporary basis, it will also provide certain corporate services to ensure a smooth transition. The fees Yum! receives for these services are expected to offset corporate G&A costs previously attached to Pizza Hut.
Commenting on the deal, Bob Berlin, founder and managing partner of LongRange, said: “Pizza Hut is a beloved global brand with a rich heritage and a loyal customer base that few brands can match.
“We look forward to partnering with Yum! to ensure a smooth transition for the business and working with Pizza Hut’s talented team and franchise partners to drive its next phase of growth through investments that deliver consistently great food and experiences for customers around the world.”
Pizza Hut Mainland China
Pizza Hut in Mainland China will be acquired by Yum China Holdings Inc, in separate transactions for approximately $1.2 billion.
Pizza Hut is the largest casual dining restaurant brand in China and continues to capture significant growth opportunities in the market.
With 4,375 restaurants across more than 1,100 cities, Yum China is targeting the expansion of Pizza Hut’s footprint to over 6,000 stores by 2028 and the doubling of its operating profit by 2029 compared with that for 2024.
“Moving from the exclusive licensee to the brand owner of Pizza Hut in Mainland China represents a transformative milestone for us, demonstrating our conviction and long-term commitment to the China market. We see tremendous opportunities ahead, and we are still only at the early stage of our planned growth trajectory for Pizza Hut China,” said Joey Wat, CEO of Yum China.
“Becoming the brand owner will give the Company greater strategic flexibility to drive innovation across the menu, store formats, new modules, and operations.
“In addition, the elimination of the license fee payments to Yum! Brands are expected to enhance store economics and lower store-opening thresholds, which support Pizza Hut’s margin expansion, growth acceleration and market leadership in China. As always, we remain fully committed to delivering an exceptional experience for our customers.”
Yum! Brands and Yum China will continue to work together, with their partnership now focusing on just KFC and Taco Bell.
Why is Pizza Hut being sold?
The move follows a review of ‘strategic options’ for the Pizza Hut brand that began in November 2025 after several quarters of weak performance.
In February, Yum! Brands announced it was considering selling up as it looked to close 250 US Pizza Hut restaurants.
Pressure for the business has come from delivery services such as Deliveroo which have taken a bite from sales.
The Yum!’s leadership team and Board of Directors say these deals provide ‘the strongest path’ for shareholder value, while giving Pizza Hut an ownership structure tailored to its distinct markets, competitive strengths and long-term priorities.
“These transactions enable Yum! to be a more focused company that continues to leverage scale, technology and talent to accelerate our raising the B.A.R. priorities and deliver sustained value for our stakeholders,” said Chris Turner, CEO at Yum! Brands.
“Under LongRange and Yum China, Pizza Hut will be well positioned for future growth with ownership that brings deep expertise in the restaurant industry. Pizza Hut is one of the most iconic restaurant brands in the world, and we are proud of the important role it has played in Yum!’s history. Pizza Hut was built by the passion and dedication of our team members, employees and franchisees, and we’re excited for the next chapter.”
Across the two deals, Yum expects to get around $2.3 billion in cash once everything is settled. The business also anticipates to incur one-time expenses of about $85 million during the remainer of 2026 to complete the separation.
