CKF -12.93% following a trading update when CKF said in the first 16 weeks of FY25 (to 18 August 2024), total sales had grown by 1.1%. However, the profit benefit of higher sales was more than offset by the impact of persistent inflation on its cost of sales, labour and energy. For the first 16 weeks of the FY25, the total company sales of the KFC operator grew by only 1.1% over the prior corresponding period.
- A 2.5% increase in KFC Australia sales was partially offset by a 1.8% decline in KFC Europe sales.
- Also, it is worth noting that KFC Australia’s sales growth has been driven by new store openings, with same-store sales down 0.3% in the prior corresponding period.
- Management expects its group underlying EBITDA margin to fall by 1.3% to 1.6% (from 15.8% in FY 2024).
- Underlying EBIT margins are expected to decrease between 1.5% to 1.8% (from 8.8% in FY 2024).
The stock hit a 52-week low following the release, and we see no reason to catch this particular falling knife.
MM is neutral towards CKF
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