The Collins Foods Ltd (ASX: CKF) share price is down more than 1% after reporting its FY26 result.
Collins Foods is a major KFC franchisee operator in Australia and Europe.
FY26 result
Here are the highlights for the 53 weeks to 3 May 2026 (FY25 was a 52-week year):
- Revenue grew 8.6% to $1.59 billion
- Underlying EBITDA (EBITDA explained) grew 6.3% to $244.5 million
- Underlying EBIT increased 10.1% to $130.7 million
- Underlying net profit after tax (NPAT) grew 13% to $61.4 million
- Statutory net profit jumped 280.5% to $47.1 million
- Final dividend of $0.15 per share
- Full-year dividend of $0.28 per share, up 7.7%
What happened in FY26?
Collins Foods reported that KFC Australia delivered revenue growth of 7.6% to $1.24 billion, with same-store sales (SSS) growth of 2.7%. KFC Australia’s underlying EBIT improved by 6.6% to $155.8 million.
Meanwhile, KFC Europe saw revenue growth of 12.5% to $351.3 million, with SSS growth of 0.8%. Underlying EBITDA rose 14% to $44.9 million and underlying EBIT jumped 94.7% to $14.9 million.
The statutory net profit jumped, which included the inclusion of $7.5 million in restaurant impairment charges, a reversal of impairments in Germany of $1.1 million, a $1.4 million provision top-up for prior year potential wage underpayments and $7.3 million in class action settlement and related costs.
Collins Foods also noted that the business reduced its net debt to $119.6 million (down from $137.9 million in FY25).
Mixed trading update
In the first eight weeks of FY27, the company said its total KFC sales grew by 6.7% in Australia, 26.4% in Germany (including the impact of acquired restaurants in Bavaria for four weeks), while the Netherlands was 5.2% lower.
It also reported that Collins Foods’ SSS growth was 4% in Australia, but declined by 7.2% in Germany and dropped 7.8% in the Netherlands.
Collins Foods said that European SSS suffered as a result of consumer sentiment amid the Middle East conflict and high fuel prices.
It also said that commodity inflation is expected to be “flat to modest” in Australia, while in Europe deflation is expected. Fuel surcharge impacts on the cost base to date have been “modest”.
Collins Foods said that while labour inflation remains elevated in Australia and Europe, productivity initiatives driven by AI-powered operations and automation are “progressing to plan”.
Avian influenza impacts in Europe are expected to “dissipate over coming month”. It has supply contingency plans across the KFC network if there are disruptions.
It expects to build between seven to 10 restaurants in Australia and seven in Germany.
Final thoughts on the Collins Foods share price
With the Collins Foods share price down 25% since January 2026, I think it looks undervalued with how the company is able continue expanding its networks in Australia and Europe, which can add to revenue, scale benefits and earnings. The rising dividend is also helpful for returns, in my opinion.
I think it’s one of the cheaper ASX growth shares and ASX dividend shares to consider, though I’m not expecting huge growth, as it can be exposed to a weaker consumer and rising costs during certain operating conditions.
Overall, I’d be happy with this update if I were a shareholder.
