Highlights

  • Collins Foods reported record FY26 Revenue of AUD 1.593 billion, up 8.6%.
  • Underlying NPAT from continuing operations increased 13.0% to a record AUD 61.4 million.
  • Total company sales increased 6.6% in constant currency during the first 17 weeks of FY27.
  • KFC Australia remained the main Earnings platform, while Germany is being developed as the company’s second major growth pillar.

Collins Foods Limited (ASX:CKF) is one of the largest operators of KFC restaurants in Australia and has increasingly positioned Europe, particularly Germany, as a second platform for long-term growth.

The group operates KFC restaurants across Australia, Germany and the Netherlands under Franchise arrangements with Yum! Brands. Its Business model centres on restaurant operations rather than ownership of the KFC brand, meaning sales growth, store-level margins, labour productivity, food costs and network expansion are central to earnings performance.

Collins Foods’ latest substantive update came at its Annual General Meeting on 1 September 2026, when management provided trading figures for the first 17 weeks of FY27. The update followed record FY26 revenue and underlying profitability and provided an early view of how its major markets were performing in the new financial year.

FY26 Performance

For the financial year ended 3 May 2026, Collins Foods reported record group revenue of AUD 1.593 billion, representing growth of 8.6%.

Underlying EBITDA reached AUD 244.5 million, while underlying NPAT from continuing operations increased 13.0% to a record AUD 61.4 million. Statutory NPAT was AUD 47.1 million.

Cash generation also improved. Net Operating Cash Flow reached AUD 150.1 million, which management described as cash conversion of approximately 94%.

The stronger cash position supported a reduction in net Debt to AUD 119.6 million, while the net Leverage Ratio declined to 0.77 times.

Collins Foods declared a fully franked final Dividend of 15 cents per share, taking the full-year FY26 dividend to 28 cents per share from 26 cents in FY25.

For investors, the combination of earnings growth and lower leverage provides greater financial flexibility as the company accelerates restaurant development in Germany while continuing to invest in its Australian network.

Australian Engine

KFC Australia remains the core of the Collins Foods business.

FY26 Australian KFC revenue increased 7.6% to AUD 1.241 billion, while same-store sales increased 2.7%.

Australia is already a relatively mature KFC market, which means future growth depends on more than simply opening large numbers of restaurants. Management is increasingly focusing on new customer occasions, operational execution, menu innovation and greater utilisation of existing stores.

Initiatives include extended trading hours and exploration of additional dayparts such as breakfast. These measures are aimed at creating more opportunities for customers to visit restaurants without relying entirely on traditional lunch and dinner periods.

Digital ordering and delivery are also increasingly important. Quick-service restaurant customers expect convenience across mobile ordering, delivery, drive-through and physical restaurants, requiring Collins Foods to continue investing in technology and operational capacity.

The Australian business also benefits from the established scale of KFC, although cost-of-living pressures mean value remains important to customer decision-making.

Germany Expansion

Germany represents the group’s most significant international growth opportunity.

Collins Foods completed the Acquisition of eight KFC restaurants in Munich on 1 June 2026, increasing its German network to 25 restaurants.

The acquisition forms part of a broader agreement with Yum! Brands to accelerate KFC expansion in Germany. Collins Foods has previously outlined plans to develop 40 to 70 new restaurants in the country over five years.

Germany offers a considerably larger addressable market than the existing Collins Foods network currently serves. However, execution will require suitable sites, disciplined Capital Investment and consistent restaurant economics.

FY26 German same-store sales increased 3.7%, demonstrating positive underlying Demand before the recently acquired restaurants materially increased the network.

The larger German platform also gives Collins Foods opportunities to spread regional management and infrastructure costs across a wider restaurant base over time.

Latest Trading Update

The 1 September 2026 AGM update provided the first detailed trading view for FY27.

For the first 17 weeks of the financial year, total company sales increased 6.6% compared with the prior corresponding period on a constant-currency basis.

KFC Australia total sales increased 6.4%, while same-store sales rose 3.4%.

Germany recorded a 44.0% increase in total sales, largely reflecting the expanded restaurant network following the Munich acquisition. German same-store sales, however, declined 5.3% over the period.

In the Netherlands, total sales declined 2.5% and same-store sales fell 3.4%.

The regional differences are important. Australian performance remained positive, while Germany’s substantial headline growth reflected network expansion rather than comparable-store growth.

Management noted improving recent trends across Europe, but the region remains an important execution area given weaker consumer conditions and the integration of the larger German footprint.

Portfolio Simplification

Collins Foods has also simplified its business by exiting Taco Bell Australia.

The transaction was completed on 17 August 2026, with 20 restaurants transferred to a joint venture. Seven other restaurants had already been closed during FY26.

The company expects to recognise a one-off gain of approximately AUD 20 million to AUD 22 million associated mainly with the transfer of Lease liabilities.

The exit allows management to concentrate more capital and operating attention on KFC, where Collins Foods already has significant scale and established franchise expertise.

This sharper portfolio focus fits with the company’s strategy of prioritising profitable KFC expansion in Australia and Germany rather than maintaining multiple restaurant concepts.

FY27 Focus

For Collins Foods (ASX:CKF), FY27 is likely to be shaped by four main areas.

Australian same-store sales will remain important because the market generates the majority of group revenue and earnings.

Germany will be closely watched as Collins Foods integrates the acquired restaurants and progresses its development agreement with Yum! Brands.

European profitability is another priority. Higher sales alone will not determine the success of the strategy; restaurant margins, labour productivity and operating execution will be equally important.

Finally, balance-sheet discipline remains relevant. Lower leverage gives Collins Foods greater capacity to fund new stores, but international expansion still requires careful capital allocation.

Final Takeaway

Collins Foods entered FY27 from a stronger financial base after FY26 revenue reached a record AUD 1.593 billion and underlying NPAT increased 13.0% to AUD 61.4 million.

The September trading update showed continued momentum in Australia, with KFC total sales up 6.4% and same-store sales up 3.4% during the first 17 weeks of FY27.

Germany is becoming increasingly important following the acquisition of eight Munich restaurants, although weaker comparable sales demonstrate that network growth will need to be matched by improved underlying restaurant performance.

For Collins Foods (ASX:CKF), the next phase will therefore centre on Australian execution, profitable German expansion, European Margin improvement and disciplined deployment of capital across its increasingly focused KFC portfolio.