Kyochon F&B Reports 38.6% Drop in Operating Profit Last Year Due to Costs of Direct Management Transition

Operating Profit Down 38.6% Due to One-Time Expenses
Net Profit Drops Sharply Despite Sales Growth

Kyochon F&B, the operator of the chicken franchise Kyochon Chicken, reported a decrease in operating profit last year due to a one-time increase in expenses.

Kyochon F&B announced on the 12th that its consolidated operating profit for last year was 15.2 billion KRW, down 38.6% compared to the same period the previous year.

During the same period, sales increased by 8% to 480.6 billion KRW, while net profit dropped 95.8% to 500 million KRW.

The new Kyochon F&B headquarters building in Pangyo. Kyochon F&B

In the fourth quarter of last year, sales reached 125.9 billion KRW and operating profit was 5.5 billion KRW. Sales increased by 13.2% year-on-year, but operating profit decreased by 22.6%. The fourth quarter net loss was 3 billion KRW, marking a return to the red.

A Kyochon F&B official explained, "Consumer demand has shown a full recovery trend, and global business has performed well through continuous strengthening of overseas operations. Above all, domestic chicken franchise sales increased thanks to the 'Byun Woo-seok effect.'"

However, operating profit declined due to the reflection of one-time expenses of 22.9 billion KRW related to the direct management transition of franchise regional headquarters. Excluding the costs of the direct management transition, the actual operating profit increased by 53.6% (13.3 billion KRW) from the previous year to 38.1 billion KRW.

The company official added, "With steady growth in domestic and overseas businesses, we have maintained solid growth, recording sales in the 120 billion KRW range for two consecutive quarters. We plan to enhance purchasing and logistics processes related to the direct management transition of franchise regional headquarters to improve the profit structure."