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KFC operator Collins Foods (ASX: CKF) has delivered record full-year results for FY26 with the bottom-line profit almost tripling to $47.1 million as the focus sharpens on core operations and the company prepares to exit its troubled Taco Bell business in Australia.
Revenue for the 53 weeks to 3 May 2026 hit a record $1.59 billion, up 8.6 per cent on the prior corresponding period, while underlying EBITDA grew 6.3 per cent to $244.5 million.
The 280 per cent increase in net profit after tax to $47.1 million reflects a sharp rebound from the prior year when significant impairments weighed on the bottom line, but a 13 per cent increase in underlying net profit after tax from continuing operations to $61.4 million provides a key indicator to the extent of the turnaround.
Collins Foods is transferring 20 of its 27 Taco Bell restaurants to a joint venture between a Yum! Brands subsidiary and Restaurant Brands Australia, with the remaining seven locations to close permanently. The deal is likely to be wrapped up in July or August this year.
The Taco Bell business recorded a loss from discontinued operations of $2.9 million after tax in FY26, down from a $3.5 million loss in the prior year.
A key condition for the Taco Bell transition was satisfied on 1 May this year and Collins Foods expects a one-off non-cash gain once the transfer is finalised.
Collins Foods CEO Xavier Simonet says the FY26 result has been delivered through the establishment of "clear priorities" that include driving profitable same-store sales growth and network expansion in Australia and Germany, improving profitability in the Netherlands, transitioning out of Taco Bell and "strengthening restaurant execution to deliver a better customer experience".
"We delivered strong performance against all these priorities despite an uncertain macro and geopolitical environment," says Simonet.
"The record results are a credit to the effort, creativity and passion of our restaurant and support centre teams."
Simonet says KFC's brand leadership position continues, underpinned by "product innovation, strong marketing execution, expanded usage occasions and improved execution".
Colins Foods quotes data from YouGov that shows KFC dominates the Brand Index and Brand Buzz for the quick service restaurant category, ahead of McDonald's over the past year.
"We announced the acquisition of eight restaurants in Munich which coincided with us signing new development agreements with Yum! Brands," says Simonet.
"We restructured and extended the corporate franchise agreement in the Netherlands which will allow us to focus on running great restaurants profitably. We also announced a negotiated exit from Taco Bell."
The Taco Bell exit sharpens the company's focus on KFC, which remains its growth engine across Australia, the Netherlands and Germany.
Germany is emerging as a second strategic growth pillar for the group following the completed acquisition of the Munich outlets €31.1 million ($52.2 million).
The deal, which settled during FY26, gives Collins Foods a foothold in Europe's largest economy and adds to its existing network of more than 60 KFC restaurants in the Netherlands.
Across the KFC Australia network, same-store sales growth and margin improvement underpinned the record earnings, with the company continuing to invest in restaurant refurbishments and digital ordering capabilities.
Collins Foods now operates more than 280 KFC restaurants across three countries, positioning the group as one of the largest KFC franchisees outside the United States.
The first eight weeks of FY27 have maintained the momentum with Collins Foods' KFC sales up 6.7 per cent in Australia and 26.4 per cent in Germany, although sales in the Netherlands were 5.2 per cent lower.
Same-store sales growth paints a less rosy picture with Germany down 7.2 per cent and Netherlands down 7.8 per cent, although KFC in Australia achieved growth of 4.4 per cent.
Shares in Collins Foods were trading 31c lower at $8.05 at 10.45am AEST.
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