The Collins Foods Ltd (ASX: CKF) share price has soared 9% after the KFC operator revealed strong sales growth in the first few months of FY26.
The company has KFC operations across Australia, the Netherlands and Germany.
Collins Foods FY26 update
While the first eight weeks of FY26 showed total sales growth for the business compared to FY25, sales growth has accelerated across the board in the subsequent 10 weeks, meaning that its total sales have now grown at a strong rate in the first 18 weeks of the financial year.
In the first 18 weeks of FY26:
- KFC Australia total sales grew 5.1%, with same store sales (SSS) growth of 2.3%
- KFC Netherlands total sales increased 4.8%, with SSS growth of 1.2%
- KFC Germany total sales increased 8.4%, with SSS growth of 5.8%
Europe saw the biggest improvement in sales – in the first eight weeks of FY26, the Netherlands total sales were up 2.6% and Germany sales were up 2.4%.
Collins Foods said that performance improved through the period, underpinned by a “sharper focus on execution in restaurants and impactful product innovation”.
Following this strong performance, Collins Foods said that its FY26 guidance was reaffirmed and it’s targeting year on year underlying net profit growth in the “low to mid-teens” on a percentage basis.
The KFC company also revealed that new restaurant development remains on track, including a new store in Germany which opened in mid-August under the new arrangements with Yum! Brands to accelerate development in that key market.
Collins Foods also revealed that Chris Johnson has been appointed as the new European general manager on a permanent basis.
Management comments
The Collins Foods Managing Director and CEO Xavier Simonet said:
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.
Final thoughts on the Collins Foods share price
It is pleasing to see the company is recovering from a difficult period due to inflation of its own costs and then a challenging economic environment for its customers.
If sales growth, particularly SSS, remains significantly positive, then I think this could still be a good time to invest in the business because of its potential for the store rollout in the coming years.
It’s one of the ASX growth shares and ASX dividend shares I’d keep an eye on, though it’s not as cheap as it was before this update.
