Collins Foods expects lower profit margin in H1 2025

Sales increased of 1.1% were outweighed by higher costs due to inflation.

Collins Foods, operator of KFC and Taco Bell, is expecting lower profit margins for the first half of the year in the 2025 financial year.

The group reported that in the first 16 weeks of the Company’s FY2025 financial year, total company sales grew 1.1%. However, profit gains were more than offset by the impact of persistent inflation on the cost of sales, labour and energy. 

Same-store sales (SSS) performance continued to reflect weaker consumer sentiment in Australia and Europe and the impacts arising from the conflict in the Middle East, which has affected sales in the Netherlands.

Group underlying Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA)  for H1 FY2025 margins are expected to reduce, in the range of 1.3% – 1.6% (FY2024: 15.8%) with underlying EBIT margins expected to decrease, in the range of 1.5% – 1.8% (FY2024: 8.8%). 

However, Collins Foods is still expanding, with plans to open new KFC restaurants in Australia and Europe. 

The group said it remains highly cash generative and has a strong balance sheet, ensuring it can invest in growth opportunities domestically and in Europe as they arise.