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Yum! Brands (YUM) Spruces up Menu With New KFC Chicken Sandwich

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Zacks Equity Research
·3 min read
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Yum! Brands, Inc.’s YUM recently unveiled the new KFC Chicken Sandwich in select markets and plans to cover all 4,000 KFC restaurants in the United States by the end of February 2021.

With the price tag of $3.99 (for a-la carte) and $6.99 (for combo meal), the new sandwich comprises a quarter-pound crispy chicken breast filet that’s been double breaded, a toasted brioche bun, pickles along with the option of Colonel's real mayo and spicy sauce. In order to find the winning combination that perfectly complements KFC's fried chicken, the KFC food innovation team had tested every ingredient of the new sandwich.

In this regard, Andrea Zahumensky, chief marketing officer, KFC United States, stated, "Many customers hadn't considered KFC as a part of the chicken sandwich conversation, but anyone who tastes this sandwich will know, without a doubt, that we're playing to win."

Meanwhile, KFC has a history of testing menu items and evaluating customer feedback to understand consumer tastes and preferences. Last year, the brand launched its new Secret Recipes Fries nationwide. Given the perfect blend of KFC's renowned 11 herbs and spices, it pairs perfectly with KFC Extra Crispy Tenders and the New KFC Chicken Sandwich. Markedly, the Secret Recipe Fries quickly became KFC's best-selling side item.

Price Performance

Coming to price performance, shares of Yum! Brands’ have gained 10.6% in the past three months compared with the industry's 4.5% growth. Notably, the company is benefitting from its digital efforts, unit expansion and other sales-building initiatives. Also, increased focus on third-party delivery services bodes well. At the end of third-quarter 2020, the company had more than 35,000 restaurants offering delivery globally, up 11% year over year. Meanwhile, earnings estimates for 2021 have moved up in the past 30 days, depicting analysts’ optimism regarding the stock growth potential.

Zacks Rank & Other Key Picks

Yum! Brands currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the Zacks Retail-Wholesale sector include Jack in the Box Inc. JACK, L Brands, Inc. LB and Tapestry, Inc. TPR, each sporting a Zacks Rank #1.

Jack in the Box has a three-five year earnings per share growth rate of 10.6%.

L Brands has a long-term earnings growth rate of 13%.

Tapestry’s 2021 earnings are expected to surge 133%.

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