(Reuters) -Australian fast-food chain operator Collins Foods said on Tuesday it planned to exit its underperforming Taco Bell business within a year, pivoting instead to the expansion of its KFC operations in Germany.
The Brisbane-based firm, which operates 27 Taco Bell outlets in Australia, said it was in talks with the parent of the Mexican food brand to transfer the business to new ownership.
“If a new operator cannot be identified and/or an agreement cannot be reached, other exit options will be explored,” Collins Foods said.
Shares of the company dropped as much as 2.7% to A$8.44 by 0058 GMT, compared with a 0.4% rise in the broader benchmark index.
In December, the quick-service restaurant operator posted a 2% drop in revenue from Taco Bell for the first half of fiscal 2025, as it struggled to compete with key Mexican food rival Guzman Y Gomez.
Guzman, which listed in Australia last year, posted a 9.4% same-store sales growth for its local stores in the first half, while those for Taco Bell fell 0.3%.
Collins Foods also said it signed a deal with global fast-food giant Yum!
Brands to expand the number of KFC restaurants in Germany.
Collins, which franchises 16 of the 207 KFC outlets in Germany, said the fried chicken brand is “underpenetrated” in the country.
It plans to open 40 to 70 new outlets in the country over the next five years.
The company also flagged a A$25.5 million to A$32.7 million ($16.11 million to $20.66 million) impairment from its Netherlands operations, and announced several executive changes, including the exit of Hans Miete, its CEO for Europe.
($1 = 1.5830 Australian dollars)
(Reporting by Aaditya Govind Rao in Bengaluru; Editing by Alan Barona and Christopher Cushing)
