Pizza Hut Making Some Gains, But Still Losing Overall

Pizza Hut has done better, but has a long way to go.

Yahoo! Finance is reporting that same-store sales for the year were down one percent internationally, while same-store sales were down three percent in the U.S. This in light of the new menu that was introduced in November of last year, which is showing some promise — but the results are still disappointing. The fourth quarter results show no change.

YUM! Brands, the parent company of Pizza Hut, is not entirely pleased with the results, but do see some progress being made. YUM! CEO Greg Creed and spokesman Jonathan Blum showed considerable progress in attracting millennials, the new core “now” market that everyone is trying to attract. The problem is the everyday customer is still out on the new menu.

Another issue is that customers feel that Dominos and Papa John’s deliver better quality pizza for the dollar. With pizza sales increasing overall, Pizza Hut will want to cut into that growing market to improve their numbers.

Creed, who began as CEO on Jan. 1, said “the initial relaunch of the Pizza Hut brand in the U.S. did not deliver the sales lift we expected,” but that “consumers have responded positively to the new menu and we intend to leverage this more effectively going forward.” Speaking at his first conference call report, Creed said that Pizza Hut was still performing below expectations, but were on the right course for future progress.

Three months previous, Blum was asked about the new direction. Blum responded that Pizza Hut was already enjoying an “expected U.S. turnaround that’s in its early stages,” and said the company had plans in place for “aggressively marketing product innovation and value all around the globe.”

The Motley Fool is reporting that Pizza Hut does have one positive to look forward to. Though the final numbers haven’t been released, Pizza Hut had, by halftime, topped its Super Bowl record of $10 million in sales. This was credited to the new streamlined digital ordering online. The new digital ordering system, coupled with the new menu changes, do point to a slow growth, but growth nonetheless.

Fresh Business Thinking is reporting that Pizza Hut felt a huge drop in like-for-like sales from last quarter in 2013 to the last quarter in 2014. In December 2013, Pizza Hut reported a profit of $321 million. One year later, they reported a loss of $86 million. The reason that is pinpointed for this loss is in July, when YUM! was accused of using expired meat, an accusation that kept many customers away from Pizza Hut stores.

Pizza Hut is expecting to rebuild their profit during 2015, then have a big second half and regain what has been lost.

[Image courtesy of RGS Computing]