Cost-of-living pressures haven’t stopped Australians enjoying their KFC, with same-store sales at Collins Foods’ local franchises rising 6.6 per cent for the first half of 2023/24.
Collins Foods announced on Tuesday that its 275 Australian KFC restaurants had $522.9million in sales from May 1 to October 15, up nine per cent from a similar period a year ago.
Underlying earnings before interest, tax, deprecation and amortisation rose 11.1 per cent to $105.5million for its Australian KFC stores.
E-commerce channels accounted for 28.1 per cent of sales, up from 22.2 per cent from a year ago, but inflation in labour and energy continued to exert pressure on costs.
The company’s other operations are 72 KFC restaurants in the Netherlands and Germany and 27 Taco Bell restaurants across Australia, where same-store sales were up 7.9 per cent after a similar decline a year ago.
Cost-of-living pressures haven’t stopped Australians, including these two women, enjoying their KFC
Collins Foods managing director and chief executive Drew O’Malley said the turnaround for Taco Bell was encouraging, adding collaborations with popular brands such as Vegemite had helped introduce it to new customers.
Collins’ total revenue was up 14.3 per cent to $695.5million, with earnings rising 16.7 per cent to $109.9million.
‘Performance in the first half has highlighted the underlying strength of our business, and the resilience of the QSR (quick-serve restaurants) sector in challenging economic conditions,’ Mr O’Malley said.
‘As higher cost-of-living pressures continue to impact consumers, offering great tasting food that provides exceptional value has never been more important.’
So far in the first six weeks of the second half of the 2023/2024 financial year, KFC same-stores sales are up 2.9 per cent in Australia, 8.1 per cent in the Netherlands and 8.6 per cent in Germany, with Taco Bell sales up 8.7 per cent.
The company expects consumer pressures to remain high over the coming year but it had initiatives to mitigate 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 half-year, bringing its total to 275, with nine to 12 new restaurants set to open during 2023/24.
Collins is the largest franchisee of KFC stores in Australia, although Yum! Brands operates hundreds more in the country directly.
The company will pay a fully franked interim dividend of 12.5c per share, up from 12c a year ago.
Collins Foods shares were the best performing on the ASX200 on Tuesday, climbing 9 per cent to $11.01.