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Highlights

  • FY25 revenue reaches record $1.52 billion, slightly above analyst forecasts.

  • KFC Australia sales drive growth amid challenges in Europe and Taco Bell segment.

  • FY26 profit growth targeted in low to mid-teens as margin outlook improves.

Shares of Collins Foods Ltd (ASX:CKF) soared as much as 26% on Tuesday, trading at $9.15, after the quick-service restaurant operator released its full-year results for FY25 and outlined an upbeat profit outlook for the year ahead.

For the 12 months ending 27 April 2025, Collins Foods posted revenue from continuing operations of $1.52 billion, marking a 2.1% year-on-year rise and slightly ahead of consensus estimates. This growth was attributed primarily to a resilient performance in the Australian KFC business, which offset softer trading in Europe and the Taco Bell brand.

KFC Australia recorded revenue of $1.15 billion, up 3% year-on-year, driven by new store rollouts and modest same-store sales growth of 0.3%. Meanwhile, KFC Europe’s revenue edged down 0.4% to $312.3 million, with same-store sales declining 2.7%. Taco Bell's revenue declined 2.5% to $53 million, reflecting challenging market dynamics.

Underlying EBITDA held steady at $228.5 million, while underlying net profit after tax from continuing operations fell 14.8% to $51.1 million. Importantly, this result exceeded Macquarie analysts' forecast of $44.3 million. On a statutory basis, net profit after tax dropped sharply to $8.8 million due to one-off items, including $40.8 million in restaurant impairments and a $3.2 million provision for potential wage underpayments. The prior year's profit also included a $20.2 million gain from the sale of Sizzler Asia.

In response to the statutory earnings decline, the board declared a full-year dividend of 26 cents per share, representing a 7% reduction compared to the previous year.

Commenting on the performance, CEO Xavier Simonet noted that despite subdued trading conditions, especially in the first half of FY25, the company saw gains in market share in both Australia and the Netherlands. He highlighted improvements in brand positioning, marketing effectiveness, product development, and operational delivery as key drivers of performance.

"In FY25, we sharpened our priorities to focus on same store sales growth and profitable network expansion in Australia and Europe," Simonet said. “Our teams delivered a resilient performance this year in a challenging consumer environment.”

Looking ahead, Collins Foods provided positive guidance for FY26, targeting underlying net profit after tax growth in the low to mid-teens. Simonet pointed to improving economic conditions, easing input costs—particularly for chicken and potatoes—and internal efficiencies as key contributors to margin improvement.

"Our H2 FY25 performance was very encouraging," Simonet added. "In FY26, we will be laser-focused on strengthening operational performance, driving same store sales growth and margin improvement."