The Collins Foods Ltd (ASX: CKF) share price is up more than 6% after the KFC operator announced a sales update.
Collins Foods is a KFC franchisee operator, with outlet networks across Australia and Europe (Germany and the Netherlands).
Collins Foods trading update and European
The company said that it continues to deliver total sales growth through network development and a focus on operational performance.
Total sales growth accelerated slightly in the second half of FY26 compared to the first half of FY26 in Australia.
German sales growth continued to show momentum, while the Netherlands total sales continued to grow, though same store sales (SSS) were slightly lower in the second half of FY26 compared to the first half.
Collins Foods also noted that it has focused on a return to profitability.
In terms of the sales figures, Australian total sales were up 6.2% in the second half (H2) to date and in the financial year to date (YTD) the sales were up 5.6%. German total sales were up 9.1% in H2, with 8.7% growth YTD. The Netherlands total sales were up 4.1% in H2, while YTD sales were up 4.4%.
European changes
The business also announced it has signed an asset purchase agreement (APA) to acquire eight KFC outlets in Bavaria, centred around Munich, increasing its presence and scale in Germany. It will add close to 50% to its German portfolio.
Collins Foods also announced its Germany development agreements have been signed to be expanded, targeting between 45 to 90 new restaurants over the next four years.
The ASX share also said that it has refocused and extended its corporate franchise agreement (CFA) for the Netherlands with Yum! Brands.
Management commentary
The Collins Foods CEO and Managing Director Xavier Simonet said:
There is a significant growth opportunity for Collins Foods in the German market, and we are pleased to be executing on our expansion in a disciplined manner. The KFC brand has substantial potential in Germany with approximately a fifth of the store footprint of the largest competitor, McDonald’s. Despite lower restaurant density, KFC enjoys strong brand awareness and consumer appeal in Germany, supporting a compelling opportunity to expand our market presence.
Pleasingly, the acquisition of a high-quality KFC portfolio in Bavaria, centred around Munich, will provide us with a platform to expand in one of Germany’s most populated and wealthiest states. These restaurants will bring us immediate scale and importantly, create a strong foundation for accelerated development. The acquisition meets the financial hurdles that guide our investment decisions, with the network to be acquired operating at higher margins than our existing German restaurants.
Further, the revised German DAs will support development in the states of North-Rhine Westphalia, including the cities of Düsseldorf and Cologne, and Baden-Württemberg, including the city of Stuttgart, as well as expansion in Bavaria. These three states together account for more than half of Germany’s 83 million population and are amongst the most prosperous states.
The updated Netherlands CFA brings our responsibilities into closer alignment with our other operating markets and will enable us to focus more sharply on improving sales and profitability across our network.
Final thoughts on the Collins Foods share price
The business’ continued expansion in Europe seems like a smart move considering how large the population is – Germany and the Netherlands have a combined population of more than 100 million.
There is a significant room for growth in those countries and I think the Collins Foods share price could continue to perform over the long-term. It’s one of the ASX dividend shares and ASX growth shares I’d want to have on my watchlist.
