Collins Foods Sales +6.6% in 17 Weeks, Constant Currency

Collins Foods (ASX:CKF) released the Chair's address and the Managing Director and Chief Executive Officer's address for its 2026 annual general meeting, including a trading update. Total company sales in the first 17 weeks of FY27 were up 6.6 per cent on the prior corresponding period on a constant currency basis. Over that period KFC total sales were up 6.4 per cent in Australia, down 2.5 per cent in the Netherlands and up 44.0 per cent in Germany, while same store sales were up 3.4 per cent in Australia, down 3.4 per cent in the Netherlands and down 5.3 per cent in Germany. For the most recent four weeks, KFC total sales were up 5.0 per cent in Australia, up 4.9 per cent in the Netherlands and up 58.8 per cent in Germany, with same store sales up 3.1 per cent in Australia, up 3.1 per cent in the Netherlands and down 0.1 per cent in Germany. Managing Director and CEO Xavier Simonet said Europe started the new financial year softer than expected, as reported when the company released its full year results and trading update, reflecting general consumer confidence across the continent, a prolonged heatwave and a demanding prior-year lap arising from the Squid Game promotion. He said those issues affected the whole KFC system rather than the Collins portfolio alone, and that performance had since strengthened significantly in both Germany and the Netherlands compared with the first eight weeks.

On FY26, Mr Simonet said group revenue from continuing operations was a record $1,592.6 million, up 8.6 per cent, underlying EBITDA was $244.5 million, up 6.3 per cent, and underlying NPAT was a record $61.4 million, up 13.0 per cent, with underlying earnings per share of 52.0 cents. Statutory NPAT was $47.1 million and included, among other items, $7.3 million relating to the class action settlement and associated costs, $6.5 million of net restaurant impairments, a $1.4 million wage provision top-up and $0.4 million of acquisition costs. Net operating cash flow was $150.1 million, which the company said represented cash conversion of circa 94 per cent; net debt was reduced to $119.6 million and the net leverage ratio to 0.77. KFC Australia delivered FY26 revenue of $1,241.3 million, up 7.6 per cent, with same store sales growth of 2.7 per cent, and Europe delivered revenue of $351.3 million, up 12.5 per cent, with German same store sales up 3.7 per cent for the year. Collins Foods completed the acquisition of eight restaurants in Munich on 1 June, taking its German network to 25. The Chair said the board declared a final fully franked dividend of 15.0 cents per share, taking the total FY26 dividend to 28.0 cents per share from 26.0 cents in FY25. The Taco Bell exit transaction was completed on 17 August 2026, with 20 restaurants transferred to a joint venture and the remaining seven closed during FY26, four of those leases assigned to third parties and the other three described as well progressed; the company said it anticipates recording a one-off gain relating to the transfer of lease liabilities, estimated at $20 million to $22 million. At the end of FY26 the provision for estimated wage underpayments stood at $8.3 million, and Collins Foods' share of a settlement of class action proceedings concerning 10-minute rest pauses, entered into on a no-admissions basis, is approximately $9.0 million and remains subject to court approval.