KFC operator Collins Foods says it’s well prepared to protect chicken supply from bird flu

Australia’s biggest KFC operator Collins Foods says it is well prepared to mitigate any supply disruptions from the worsening bird flu outbreak across two States.

The ASX-listed company on Tuesday warned the highly contagious H5 bird flu had already pushed up poultry prices at its European operations.

Collins Foods — which runs 295 KFC stores in Australia and 80 across Germany and the Netherlands — said there have been no cases in its chicken supplies locally and suppliers have heightened biosecurity measures in place.

“I also reassure shareholders that KFC has very strong contingency plans in place to mitigate any supply disruption should it occur,” managing director Xavier Simonet said as he unveiled Collins Foods’ full-year results.

He added it was working with KFC’s US parent, Yum Brands, to manage supply chains in Australia.

In the past two weeks, four cases of bird flu have been confirmed in migratory birds in Australia. Three of these cases were in WA and one in South Australia.

Collins Foods delivered record results for the 2026 financial year, with group sales up 8.6 per cent to $1.59 billion in the year to May 3. Net profit soared nearly 281 per cent to $47.1 million, but was offset by a $7.3m class-action settlement over ten-minute rest breaks.

The group attributed the strong results to new menu products like the Zinger Banh Mi, Upside Down Double — which features a bun between two fried chicken fillets — as well as the hot and crispy wrap.

Growth was driven by KFC Australia, where revenue grew 7.6 per cent over the prior corresponding year to a record $1.24b, with same-store sales growth of 2.7 per cent.

Mr Simonet said it would extend late night opening hours to adapt to consumers’ changing eating habits and later this year, would partner with KFC South Pacific and trial a new breakfast range in select restaurants.

“KFC is underpenetrated in these day parts, providing exciting opportunities for future growth,” he said.

In Europe, revenue jumped nearly 13 per cent to $351.3m. Same-store sales rose 0.8 per cent.

“Product innovation and impactful brand campaigns continue to strengthen KFC’s position as a modern, distinctive brand across Europe,” Mr Simonet said.

Collins Food also had Taco Bell restaurants in Australia, but is selling 20 stores to a joint venture and closing the remaining seven, resulting in a $400,000 segment loss. Completion of the transaction is expected to occur by the end of August.

For the first eight weeks of the 2027 financial year, KFC sales were up 6.7 per cent in Australia and jumped more than 26 per cent in Germany.

But sales in the Netherlands fell 5.2 per cent. European same-store sales growth for the first eight weeks of 2027 was hurt by the war in the Middle East, elevated fuel prices and the recent heatwave.

Mr Simonet said the effects of the bird flu that drove poultry prices higher in Europe were expected to dissipate over coming months.

Investors will receive a final dividend of 15¢, taking the total for the year to 28¢.