Devyani International Freezes New Pizza Hut Stores in FY27
Devyani International, which operates brands like Pizza Hut, KFC, and Costa Coffee, announced it will refrain from opening new Pizza Hut locations in calendar year 2026 while concentrating on consolidating and realigning the pizza chain’s offerings.
Manish Dawar, Whole-time Director, President, and CEO of DIL stated that Pizza Hut India posted a revenue of Rs 169.2 crore in the fourth quarter of FY26, a decrease of 3.5 percent compared to the previous year, with same-store sales growth (SSSG) falling by 3.7 percent.
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Nonetheless, typical daily sales stayed consistent at approximately Rs 30,000 for each store each day.
The brand's contribution for the quarter was mildly negative due to operating leverage challenges stemming from reduced same-store sales. Pizza Hut concluded FY26 with 639 locations and noted no net changes during the quarter.
Dawar also mentioned that Pizza Hut’s marketing activities will be integrated into its operations as part of the merger process. Newly appointed Chief Marketing Officer Sandeep Anand will also manage Pizza Hut operations. Anand has experience in both the QSR and technology industries.
KFC maintained robust growth during the quarter, with revenue increasing by 14.6 percent year-over-year to Rs 586 crore in Q4 FY26. The company reported that KFC achieved almost 15 percent growth annually during that time frame.
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Devyani International reported that online same-store sales growth for KFC fell in the quarter, while offline same-store sales increased as the company cut back on online promotions to boost dine-in customers. The company has redirected its attention to enhancing in-store offers for customers rather than online discounts.
The firm stated that over 80 percent of its KFC outlets are now fitted with digital kiosks, designed to improve customer convenience and interaction. It is also expanding DIL Commerce, its integrated technology platform aimed at enhancing operational efficiency and bolstering customer interaction.
The portfolio of its in-house brands, featuring VANGO and Biryani by Kilo, experienced mid-single digit positive growth in same-store sales throughout the quarter.
Revenue from proprietary brands increased by 11.5 percent year-over-year on a comparable basis to Rs 91.1 crore in Q4 FY26.
The company announced that Biryani by Kilo has now attained a positive brand contribution after recovering from its losses. After the enhancement, Devyani International has begun a controlled expansion via smaller express formats and trial launches in offline markets.
In terms of operations, the firm noted that the continuing LPG crisis caused by the West Asia conflict created challenges for the enterprise, although the effects were limited thanks to proactive mitigation strategies.
The company mentioned that certain Biryani by Kilo locations have transitioned to electric options and additional steps are being taken to lessen reliance on LPG going forward.
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Devyani International concluded FY26 with a total of 2,256 outlets across its system, marking a net gain of 217 stores in the past year.
For FY27, the company anticipates adding approximately 200-225 net new outlets, with 100-110 of those projected to be from KFC. The additional growth will be propelled by Costa Coffee, Biryani by Kilo, and foreign companies. Nonetheless, there are no plans to open new Pizza Hut locations this year.