Kyochon F&B Q2 Sales Up 12%... 9.9 Billion KRW Operating Loss Due to Franchise Headquarters Direct Management Transition

Increased Domestic Sales in Family Month through Sports Events
Over Double Growth in Overseas MF Royalties Compared to Last Year
Temporary Operating Loss... Profitability Expected to Recover in Second Half

Kyochon F&B, the operator of Kyochon Chicken, announced on the 14th that its consolidated sales for the second quarter reached 113.9 billion KRW. This represents an 11.7% increase compared to the same period last year.

Kyochon cited the growth background as ▲ an increase in subscribers to its own order app (5.58 million), and a recovery in customer demand due to Family Month and various sports events, which boosted domestic business sales, and ▲ an increase in related export sales due to continuous strengthening of overseas business.

In overseas business, exports of materials and royalties to master franchise (MF) countries more than doubled compared to the same period last year, and related performance showed a favorable trend as new global stores in China, Malaysia, Taiwan, and others continued to expand.

Additionally, new business-related performances such as Memil Danpyeon, Moonbear craft beer, and eco-friendly packaging also drove sales growth.

Furthermore, Kyochon F&B completed the direct management conversion of franchise regional headquarters (branches) nationwide as of the 12th of last month. In May, Kyochon announced plans to convert 23 franchise regional headquarters nationwide to direct management to reduce distribution stages and promote operational rationalization.

By completing the direct management conversion of franchise regional headquarters nationwide, it is expected that positive effects such as improving long-term profitability through logistics efficiency and enhancing corporate value will continue.

However, due to the one-time costs incurred for the direct management conversion of franchise regional headquarters, an operating loss of 9.9 billion KRW occurred in the second quarter, resulting in a temporary operating deficit.

Kyochon F&B expects sales to rise in the second half of this year, supported by various positive factors, and profitability to improve due to management efficiency effects following the completion of the direct management conversion of franchise regional headquarters.

It also expects to drive overall sales growth with the strong sales of the new menu "Kyochon Oksusu," launched for the first time in two years.

A Kyochon F&B official said, “With the completion of the direct management conversion of franchise regional headquarters, we expect an improvement in corporate value through management efficiency. In the second half of this year, we will promote growth in the domestic business led by the new menu ‘Kyochon Oksusu’ and lead sales growth through continuous expansion of overseas business and new businesses.”