Please ensure Javascript is enabled for purposes of website accessibility

KFC's Nashville Hot Chicken Hopes to Heat Up Yum! Brands' Stock

By Rick Munarriz - Jan 19, 2016 at 11:38AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A new pickle-saddled spicy chicken item aims to drum up sluggish sales at Kentucky Fried Chicken.

Source: KFC.   

There's a new way to enjoy KFC's fried chicken, and it's going to be tempting if you like your poultry spicy. KFC parent Yum! Brands (YUM -0.51%) introduced Nashville Hot Chicken at all of its domestic restaurants on Monday, following a test last year in the Pittsburgh market that Yum! calls its most successful product test in recent history.

Restaurants specializing in hot chicken -- where the poultry is marinated in pickle brine, pressure fried, and smothered in hot sauce -- are growing in popularity, and KFC wants to be the one to take the tastebud-numbing delicacy nationwide.

KFC's Nashville Hot Chicken is available as a single breast, drumstick paired up with a thigh, or three chicken tenders starting at $5.49. The meal comes with pickle chips, cole slaw, and a biscuit. Larger servings are available, maxing out at a 24-piece "tailgate platter" of chicken tenders at a recommended price of $29.99. That platter may come in handy this winter as folks get together for NFL playoff-viewing parties. 

The new offering comes at a time when Yum! Brands itself can use a spark. KFC is starting to bounce back in China -- the chain's largest market in terms of locations -- following a scare tied to a supplier that was accused of improper food handling practices. The rebound in China and robust growth in several international markets helped push comps at KFC 3% higher on a currency-adjusted basis in Yum! Brands' latest quarter, but things aren't going as well closer to home. Domestic KFC's clocked in with a 2% uptick in comps on flat system sales growth for the period. 

Fried chicken remains popular, but the same can't be said about the publicly traded companies specializing in quick-service fried chicken. Bojangles (BOJA) went public at $19 just eight months ago. The stock went on to trade as high as $28.45, but Bojangles has gone on to shed nearly half of its value. Bojangles stock is now a broken IPO in the mid-teens. Popeyes Louisiana Kitchen (PLKI) has done a better job of holding on to its gains. Popeyes announced preliminary financial results last week, highlighted by a nearly 6% uptick in comps for all of 2015.

Spicy chicken is a popular item at Bojangles and Popeyes, and it will be interesting to see if KFC's Nashville Hot Chicken either eats into sales of its smaller rivals or helps stir up a broader appetite for spicy fried chicken that improves the prospects of all of the players.  

Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Popeyes Louisiana Kitchen. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Yum! Brands, Inc. Stock Quote
Yum! Brands, Inc.
YUM
$117.82 (-0.51%) $0.60
Popeyes Louisiana Kitchen, Inc. Stock Quote
Popeyes Louisiana Kitchen, Inc.
PLKI
Bojangles', Inc. Stock Quote
Bojangles', Inc.
BOJA

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.