Cost of living pressures haven’t stopped Australians from enjoying their KFC, with sales at Collins Foods’ local stores up 6.6 per cent in the first half of 2023/2024.
Collins Foods announced on Tuesday that its 275 Australian KFC restaurants had sales of $522.9 million between May 1 and October 15, a nine percent increase from a comparable period a year ago.
Underlying earnings before interest, tax, depreciation and amortization rose 11.1 percent to $105.5 million for Australian KFC stores.
E-commerce channels accounted for 28.1 percent of sales, up from 22.2 percent a year ago, but labor and energy inflation continued to put pressure on costs.
The company’s other operations include 72 KFC restaurants in the Netherlands and Germany and 27 Taco Bell restaurants across Australia, where same-store sales rose 7.9 percent after a similar decline a year ago.
Cost of living pressures haven’t stopped Australians, including these two women, from enjoying their KFC
Collins Foods general manager and CEO Drew O’Malley said the turnaround for Taco Bell was encouraging as partnerships with popular brands such as Vegemite had helped introduce it to new customers.
Collins’ total revenue rose 14.3 percent to $695.5 million, while profits rose 16.7 percent to $109.9 million.
“The first half performance has highlighted the underlying strength of our business, and the resilience of the quick-serve restaurant (QSR) sector in challenging economic conditions,” said Mr O’Malley.
‘As increased pressure on the cost of living continues to impact consumers, offering great-tasting food that offers exceptional value has never been more important.’
So far, KFC’s same-store sales in the first six weeks of the second half of the 2023/2024 financial year have increased by 2.9 percent in Australia, 8.1 percent in the Netherlands and 8.6 percent in Germany, while Taco Bell’s sales have increased. 8.7 percent.
The company expects consumer pressure to remain high in the coming year, but has taken initiatives to alleviate margin pressure in the short term.
KFC signage is pictured on the Gold Coast, Queensland. KFC has bucked the trend of consumers cutting back due to cost-of-living pressures
It opened four new KFC restaurants in Australia in the six months, bringing the total to 275, and will open nine to 12 new restaurants in the 2023/2024 period.
Collins is the largest franchisee of KFC stores in Australia, although Yum! Brands operates hundreds more directly in the country.
The company will pay a fully franked interim dividend of 12.5 cents per share, up from 12 cents a year ago.
Collins Foods shares were the best performers on the ASX200 on Tuesday, rising 9 per cent to $11.01.