Shares in Collins Foods Limited (ASX: CKF), the operator of KFC outlets across Australia and Europe, jumped 7% to $10.24 in early trading after the company reported positive sales momentum in the first 18 weeks of FY26.
Highlights from the update include total company sales up 6.7%, same-store sales growth across all markets, reaffirmed FY26 guidance for profit growth in the low to mid-teens, new store openings in Europe, and a permanent appointment of Chris Johnson as General Manager Europe.
“We remain attracted to the investment thesis for Collins Foods, notably the strength of the KFC brand (particularly in Australia), significant long term growth opportunities through store rollout (particularly in Europe), and strong cash conversion,” Wilsons Advisory equity analysts James Ferrier and Declan Carroll said.
Sales growth across all markets
Collins Foods reported total sales growth of 6.7% in the first 18 weeks of FY26, supported by positive KFC same-store sales in all regions.
KFC Australia delivered total sales growth of 5.1% with same-store sales up 2.3%. In Europe, the Netherlands recorded total sales growth of 4.8% and same-store sales of 1.2%, while Germany outperformed with 8.4% total growth and 5.8% same-store sales.
The company said performance improved through the period as restaurants benefited from tighter execution and impactful product innovation. Management noted that momentum has carried over from the second half of FY25, providing a strong start to the new financial year.
Reaffirmed FY26 guidance
The company reaffirmed its FY26 guidance, targeting year-on-year underlying net profit after tax growth in the low to mid-teens.
Management said that while same-store sales comparatives will become more challenging in the second half, margin expansion is expected to continue, supported by improved sales, stronger labour productivity, reduced food wastage, disciplined cost control and deflation in some commodities.
Collins Foods emphasised its commitment to maintaining a balance between growth and operational efficiency as market conditions evolve, highlighting confidence in its ability to deliver sustainable profit expansion throughout the year.
Expansion in Europe
New restaurant development remains a priority, with progress on track in all markets. A new store opened in Germany in mid-August under Collins Foods’ revised arrangements with Yum! Brands, designed to accelerate growth in this key European market.
The move underscores the company’s commitment to building scale in Germany, where strong sales growth continues to support new investment. The company said expansion initiatives would be complemented by continued operational improvements and a sharper customer focus, enhancing the overall brand experience across its European portfolio.
Leadership appointment
Collins Foods announced the permanent appointment of Chris Johnson as General Manager Europe. The company said Johnson will be responsible for steering the group’s operations and development strategy across Germany and the Netherlands.
Managing director and CEO Xavier Simonet praised the company’s progress, noting that “sales growth accelerating in all markets” reflected enhanced customer experience, product innovation, and disciplined cost management. Simonet highlighted that these improvements, coupled with easing commodity prices, were contributing to margin gains, positioning the business for a strong performance through FY26.
“Collins Foods’ positive same-store sales momentum which began in the second half of FY25, has continued into the early periods of FY26, with sales growth accelerating in all markets. Whilst same-store sales comparatives will become more challenging as we progress through the year, our stronger performance reflects our enhanced focus on the customer experience, and on operating disciplines, supported by successful new product innovation. Improved sales, lifting labour productivity, reducing food wastage, disciplined cost management and deflation in some commodities are all contributing to margin expansion.”