The Collins Foods Ltd (ASX: CKF) share price is in focus after the business announced its FY26 half-year result.
Collins Foods is best known for operating KFC restaurants across Australia, the Netherlands and Germany. It currently operates Taco Bell restaurants in Australia, but it is looking to offload its ownership.
FY26 half-year result
Here are the financial highlights of the HY26 report for the six months to 12 October 2025:
- Revenue rose 6.6% to $750.3 million
- Underlying EBITDA (EBITDA explained) grew 11% to $113.9 million
- Underlying EBIT rose 20% to $63 million
- Underlying net profit after tax (NPAT) jumped 29.5% to $30.8 million
- Statutory net profit up 12.7% to $27.2 million
- Interim dividend per share up 18.2% to $0.13
- Net debt reduced $20 million to $138.9 million
The business said it saw growth in both Australia and Europe. Let’s look at the results.
KFC Australia
In Australia, revenue grew 5% to $563.8 million, with same store sale (SSS) growth of 2.3%. Underlying EBITDA rose 9.4% to $111.8 million and underlying EBIT grew 11.6% to $75.5 million.
The business benefited from new restaurants, an enhanced focus on “operational excellence”, strong digital growth (which accounted for 41.7% of sales, up from 33.7%) and product innovation.
Its network grew by eight new restaurants during the year, taking its total to 292 nationally, with one more planned before the end of the year.
The digital sales grew thanks to kiosk investment and growth in delivery.
KFC Europe
In Europe, revenue grew by 14.6% to $162.9 million, with SSS growth of 1.4%. Underlying EBITDA went up by 19.6% to $20.4 million and underlying EBIT soared 142.3% to $6.9 million.
Revenue in the Netherlands grew by 4.4% (in constant currency), with SSS growth of 0.4%, in what remains a challenging market for the whole fast food sector. Sales in Germany grew 8.3% (in constant currency) with SSS growth of 4.8%.
Digital sales represented 66.9% of sales in the Netherlands and 72.7% in Germany, benefiting from further investment in kiosks and growth in delivery.
Profitability benefited from SSS growth, productivity improvements and favourable fixed cost leverage.
Taco Bell
Revenue declined 3.9% to $23.6 million, with a loss of $0.5 million of underlying EBITDA and underlying EBIT.
Remediation of unpaid entitlements
The company noted that it started paying staff on 18 November 2025. As at 12 October 2025, the wage remediation provision was increased to $10.5 million, up from $8.1 million in FY25.
The provision includes amounts for salaried employee entitlements to be calculated based on the pay period set off rather than based on an annual set off.
Outlook for the Collins Foods share price
Sales growth has continued to be positive in the first seven weeks of the second half of FY26.
Australian sales rose 5.3%, with SSS growth of 3.6%. It’s expecting commodity inflation in 2026 after a period of deflation.
The Netherlands sales grew 5.6% with SSS declining 0.5%. German sales jumped 7.8%, with SSS growth of 2.3%. Pressure on poultry costs due to avian flu are expected to reduce.
Collins Foods is expecting FY26 underlying NPAT to increase in the “mid to high-teens” on a percentage basis, up from previous expectations of low to mid-teens.
Considering the company has risen more than 50% this year, it doesn’t seem cheap any more. If it can continue this positive growth beyond FY26 it could be a buy, but I don’t have strong belief that it will, so I’m happy to watch from the sidelines and look at other ASX growth shares.
