Yum! Brands, Inc. (YUM): Kentucky Fried Chicken Fires Colonel Sanders to Take on New Rivals

Panera Bread Co (NASDAQ:PNRA) is another fast casual company that could see pressure from a successful KFC Eleven national brand. In the recent second quarter, Panera saw same-store sales increase 3.5% at company-owned stores and 4.3% at franchised locations. The majority of that growth (4.3%) came from check growth with rising prices rather than transactions, however.

In the fiscal year, Panera Bread Co (NASDAQ:PNRA) is planning on opening 115 to 125 restaurants. As of June 25, the company had 1,708 stores open. The chain is pretty evenly split between company-owned stores (835) and franchised locations (873). Panera has smaller margins than rivals Yum! Brands, Inc. (NYSE:YUM)and Chipotle Mexican Grill, Inc. (NYSE:CMG), with a 14.2% operating margin. Panera recently reported poor earnings and shares could be in for a nice rebound. Down the road, Panera could see KFC Eleven enter similar territory and put further pressure on operating profits and same-store sales.

Conclusion

Shares of Yum! Brands, Inc. (NYSE:YUM) trade with a higher valuation compared to earnings. Other fast casual chains also trade with high valuations, as investors price in the growth and expansion of the companies. As Chinese worries are in the spotlight, Yum! Brands can use a positive lift from this new brand. KFC Eleven should see a strong open with a well-known and loved brand. The brand could eventually balloon into 1,000 or more locations around the nation.

The article Kentucky Fried Chicken Fires Colonel Sanders to Take on New Rivals originally appeared on Fool.com.

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