Possibly. But there is also a good chance that these sales growth results are just a blip on the landscape as massive headwinds with cost pressures facing the loyal customer base.
Im picking that sales growth will fall away.
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Costs will start to come back. Seeing it in Ag with Chem and fert. Wasn’t this stock a winner post 2008? Decline in costs and people still enjoy their chicken! Pizza prices seem the same and haven’t moved in the inflationary environment, is this their loss-leader as it’s more competitive?..
Price will be the majority for sure.
But we do know the NZ division did not see a volume decline in Y23. From the FY23 Annual Report: "As a result, same store sales growth was maintained without compromising sales volumes."
I reckon KFC NZ easily did 15%+ like-for-like price increases over 2022/2023 in NZ. To not lose volume in 2023 is very good IMO and shows how relatively defensive KFC is
Oh for sure, I absolutely don't expect +15% NZ growth to continue, especially as the comp periods lap the price increases. But by how much do you think they fall? That's what this game is about.
I would point out:
- We are already in a recession. Q1 sales update was a live view of how sales perform in a downturn (for NZ division).
- During the GFC, Restaurant Brands’ KFC stores SSS growth slowed from +7.7% to +4.4%... that's pretty bloody good.
https://www.waikatotimes.co.nz/nz-ne...nger-1-stinger
Uh-oh, price differential putting off regular customers
Jobless rate predicted to increase to 5%, minimum wage far below inflation for at least 3 years is my guess.
Then there's net positive migration (all need to eat somewhere, plus a ready supply of workers). Has to be good for margins in the NZ division.
Bird flu strain H7N7 detected on Victorian farm, hundreds of thousands of chickens euthanased
https://www.abc.net.au/news/rural/20...farm/103877560
rbd not providing quarterly updates anymore :scared: