Pizza Hut Enjoys Healthy Q1 Sales Increase In China, Sees Decrease In US

Pizza Hut’s first-quarter earnings in China definitely gave its parent company reason to celebrate.

Although the company had a little trouble getting people to chow down on its famous food this time last year — feel free to blame the avian flu for that debacle — apparently the folks at Yum! Brands have ironed out some of the major problems. According to The Motley Fool, Pizza Hut saw a very healthy increase in sales during the first quarter of 2014.

Reports indicate that Pizza Hut locations throughout China saw an increase of eight percent, which in turn helped Yum! increase its overall profit margins. Pizza Hut wasn’t the only joint that enjoyed a boost in sales; Kentucky Fried Chicken reportedly increased its same-store sales by an impressive 11 percent.

While Pizza Hut is apparently doing okay in China, the same doesn’t ring true for locations throughout the United States. The Dallas Morning News reports that the restaurant experienced a five percent drop in sales during the first quarter. Yum! Brands CEO David Novak said he’s determined to turn this slump around.

“Pizza Hut clearly had a disappointing quarter,” Novak said, describing the restaurant Q1 performance as “very poor.”

The US is apparently one of the few regions on the planet where Pizza Hut is struggling. Yum! Brands reported that sales are still very strong in Australia, UK, Africa, and Russia. Fortunately for the parent company, Taco Bell and KFC will keep them afloat while they figure out how to increase Stateside sales.

One possible solution to Pizza Hut’s problem is the so-called Hut Cafe, a stylized version of the restaurant with updated interior design and plenty of caffeine on-tap. Yum! is testing the concept in India, though the company could roll out this store to other areas of the world in the near future.

“The concept visually disrupts, for the consumer, the perception of variety inside a Pizza Hut restaurant, and it also helps build an additional day-part for the brand,” Yum! Restaurants India President Niren Chaudhary recently explained.

In addition coffee, Chaudhary said the company is focusing on “vegetarian and value.” He added, “We are excited about our new range of crave-worthy vegetarian products across formats and price-points that we have recently developed. We’ve doubled our vegetarian users and it is going to be an important part of our calendar for next year.”

According to the Business Standards, Pizza Hut is taking a page from McDonald’s business plans. The company reportedly borrowed the idea for Hut Cafe from the fast food giant’s like-minded McCafe. McDonald’s is hoping to lure customers away from traditional sit-down restaurants.

Are you surprised that Pizza Hut sales are up in China and down in the US?

[Image via Wikimedia Commons]