Consumer sentiment hasn't improved much as customers continue to struggle with cost-of-living pressure, the heads of a major fast food chain say.
But Collins Foods said it has lifted sales through "operational excellence" and successful product launches, leading to a double-digit rise in profit and an upgraded guidance.
Revenue from its 292 KFC franchises in Australia grew five per cent to $563.8 million for the half-year to October 12, with same-store sales up 2.3 per cent.
Earnings before interest, tax, depreciation and amortisation (EBITDA) from its Australian operations rose 9.4 per cent to $111.8 million.
The company credited limited-time promotions, suck as its Zinger Kebab spicy chicken fillets and a successful Christmas in July event, with attracting new customers and lifting strong brand health metrics - but added there had been no boost from customers' confidence.
"Consumer sentiment is lifting a little, but we do not see a meaningful change and we're concerned about interest rate increases or the interest rates not continuing to go down at pace," managing director Xavier Simonet told analysts on Tuesday.
"So I don't think that in the first half an uplift in consumer sentiment has actually driven much for us.
"Sales growth and margin growth result more from the focus on operational excellence and successful product launches.
"I don't see much improvement in consumer sentiment, to tell you the truth."
Consumers are still struggling with the cost of living, chief financial officer Andrew Leyden added.
In upgrading its guidance, Collins Foods forecast full-year profit to grow by the mid-to-high teens in 2025/26, rather than in the low-to-mid teens.
In addition to its Australian KFC operations, Collins Foods has another 79 KFCs across Germany and the Netherlands, along with 27 underperforming Taco Bell restaurants in Queensland, Victoria and Western Australia that it is in talks to sell.
For the first half, Collins reported global revenue rose 6.6 per cent to $750.3 million, with underlying EBITDA earnings growing 11 per cent to $113.9 million.
Collins' statutory net profit after tax grew 12.7 per cent to $27.2 million, with operating cash flows of $69.1 million.
In Australia, Collins Foods opened another eight KFC restaurants during the half-year and was on track to complete 37 restaurant remodels during 2025.
It said in-store ordering kiosks had been rolled out at all but 87 restaurants as of October 12, with the remaining restaurants scheduled to get them in the next 12 months.
It has also been trialling an expanded drinks offering that includes lemonade, milkshakes and iced coffee at select stores.
The company's 27 Taco Bell restaurants saw revenue fall 3.9 per cent to $23.6 million, posting an underlying EBITDA loss of $500,000, down from a $900,000 a year ago.
Discussions with Taco Bell International to transition the business to new ownership are ongoing, Collins Foods said.
"Firm decisions have not been made," Mr Simonet said.
"We can update the market as soon as we have further news to report."
The company will pay an interim dividend of 13 cents per share, up from 11 cents per share a year ago.
Collins Foods shares were down 3.7 per cent to $11.17 around 3pm on Tuesday.
