Filed under: Company News, Earnings, Restaurants
It's been eight months since Taco Bell introduced the Quesarito, a burrito wrapped in a quesadilla. It's as decadent as it sounds, and last year's rollout drew some negative attention given the at least 620 calories and 30 grams of fat that the item packs.
Thursday's spin on the Quesarito adds Sriracha -- the popular Asian chili-pepper hot sauce -- to the double-rolled concoction.
Keep Spinning the Flavor Wheel
Taco Bell's been busy rolling out new creations and menu tweaks in recent years. It started with Doritos Locos Tacos in 2012, serving up tacos in shells dusted as if they were nacho cheese Doritos. More than a billion of them have been sold in less than three years.
The fast-food chain was particularly busy on the innovation front last year, starting with the Waffle Taco that kicked off the national rollout of Taco Bell's breakfast menu 11 months ago. The Quesarito followed a few months later.
All of the new products have helped keep customers coming. Taco Bell is holding up better than its Yum Brands (YUM) siblings Pizza Hut and KFC in terms of year-over-year growth in comparable-restaurant sales.
Comps for domestic Yum Brands locations during the fourth quarter rose 7 percent at Taco Bell, 4 percent at KFC and 2 percent at Pizza Hut over the prior year's holiday quarter.
It isn't a surprise to see Taco Bell leading the way in terms of growth. The national rollout of the breakfast menu in March of last year should provide incremental growth until we lap the late March debut in a few weeks.
Yum Is Hoping to Live Up to Its Name
Yum Brands can use the boost if the Sriracha Quesarito is a winner. It has fallen short of Wall Street's profit targets in its last three quarters, including a sharp decline in adjusted earnings in its most recent report.
The biggest challenge at Yum Brands remains softness in China after a supplier scare, but things could certainly be better after posting a mere 3 percent uptick in global systemwide sales over the past year.
Taco Bell's success will help, even if it's the smallest of the three chains. There were 6,199 Taco Bells worldwide when the year began, less than half of the 13,602 Pizza Hut or 14,197 KFC locations out in the wild. Thursday's new menu items -- which also include a Snapple-branded lemonade freeze -- should find Taco Bell continuing to lead the way in sales growth at Yum Brands. It does move the needle, and come Thursday it will be a spicy needle at that.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
