Collins Foods Rides Falling Chicken Prices Into a Margin Squeeze

Fund managers say a European turnaround helped offset persistent domestic margin pressure in the company's FY26 result

6 Jul 2026 · 3 min read

KFC franchise operator Collins Foods benefited from falling chicken prices and improving Australian consumer sentiment through 2025, before persistent inflation pressures weighed on margins into 2026.

Falling input costs support the margin outlook

Wilson Asset Management's September 2025 update reported CEO Xavier Simonet highlighting improving Australian consumer sentiment at the company's AGM. Infinity Asset Management's October update showed the fund increasing its position as falling chicken prices reinstated conviction in the business's margin profile, a key input cost for the largest KFC operator in Australia and a growing European fast-food operator.

Persistent inflation weighs on margins

Oracle Advisory Group's March 2026 update struck a more cautious note, describing inflation as still fighting the business, with margins heavily affected and little sign of that pressure relenting. Despite the near-term margin concerns, Pendal Group's July 2026 update reported a solid FY26 result in line with market expectations, with underlying net profit after tax up 13 per cent versus the prior year, the Australian KFC network delivering EBITDA growth of 6.5 per cent, and the European business improving markedly from a weaker FY25, with EBITDA up 14 per cent.

Collins Foods (CKF, -4.5%) delivered a FY26 result in line with market expectations, with underlying NPAT up 13% versus pcp. The Australian KFC network continued to perform solidly (EBITDA +6.5%) and Europe improved from a weaker FY25 (EBITDA +14%).

— Pendal Group, Newsletter, July 2026