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Yum Brands' CEO Acknowledges Ongoing Woes At Pizza Hut Chain

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Yum Brands' CEO Acknowledges Ongoing Woes At Pizza Hut Chain

Yum! Brands, Inc. (NYSE: YUM) reported on Thursday mixed fourth-quarter results, which consisted of an earnings beat but a revenue miss.

The parent company of Taco Bell, KFC and Pizza Hut also reported that its same-store sales rose 1 percent which fell short of the 1.7 percent analysts were looking for. By segment, both the Taco Bell and KFC business saw a same-store sales growth of 3 percent but the Pizza Hut chain disappointed investors as same-store sales fell 2 percent in the quarter.

Speaking as a guest on CNBC, Yum' CEO Greg Creed acknowledged that Pizza Hut remains a "challenge," but that shouldn't take away from the momentum in the remaining two brands.

Nevertheless, Creed said his management team is busy working with franchisees to turn the business around.

Domino's Pizza, Inc. (NYSE: DPZ) is taking advantage of the growing trends of consumers staying at home and ordering in food. The question posed to the executive is quite simple: Why isn't Pizza Hut seeing the same benefit?

"Pizza Hut is about 10 percent of our operating profits — and the way I look at it is our international Pizza Hut business is doing well [so is] KFC and Taco Bell," the executive answered. "So, 90 percent of our business is growing and strong."

Creed also acknowledged that his competitors are demonstrating that there is indeed growth in the pizza category and the company will work hard to earn its fair share.

Specifically, the executive said the company needs to transform its assets and technology and become better in operations and communications.

"So, I know this is a 'show me, not tell me' and it's going to take us a while but I think the momentum we've got in KFC and Taco Bell will certainly carry us forward while we obviously fix the Pizza Hut brand in the U.S.," he concluded.

Posted-In: CNBCEarnings News Guidance Restaurants Movers Media General Best of Benzinga

 

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