With the holiday season drawing near, it’s clear that a lot of Pizza Hut’s fans are feeling the pinch.
On Tuesday, Pizza Hut reported a loss of more than $1 billion.
And the company’s stock fell more than 5% on the news.
The loss comes on the heels of a recent decline in revenue, which is expected to grow next year.
And as the company looks to improve profitability, some analysts are speculating that it could consider taking on a bigger slice of the pie.
“If the pie doesn’t come through for them, they are going to look for a way to get it,” Michael Mersh said of the chain.
But other analysts think that the chain could do better, saying that it’s hard to know what to expect in the coming years.
“Pizza Hut is not in the position to sustain profitability in this environment,” Neil Mawston, a partner at Wedbush Securities, said.
Merrill Lynch analyst Mark Blyth said that while Pizza Hut could potentially make a profit if it continues to grow its pizza business, the company could also have trouble recouping its losses.
“They are not the only pizza chain that could potentially see their share price go down if the pizza business is not profitable,” Blytson said.
While the chain has been profitable for many years, Mawston said it’s only a matter of time before they start seeing their share prices start to fall.
“There’s a lot more risk now,” Mawston added.
“I think Pizza Hut will go to great lengths to try and turn things around and they’re going to try to do it through a mix of a restructuring, through acquisition, through divestitures.”
Pizza Shack shares closed up more than 2% at $3.09.