This article first appeared on GuruFocus .
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Consolidated Sales:RON378 million in Q1 2026, up 4.2% year-on-year.
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EBITDA:RON24 million, broadly in line with the prior year period.
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Romania Sales:Over RON326 million, nearly 5% growth.
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Italy Sales:RON45.6 million, 2% increase.
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Moldova Sales:RON6.2 million, impacted by restaurant relocation.
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KFC Sales:RON324.3 million, 4.2% growth.
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Taco Bell Revenue:RON27.1 million, up 12.2%.
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Pizza Hut Revenue:RON26.3 million, ongoing optimization measures.
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Cioccolatitaliani Revenue:RON0.3 million.
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Total Expenses:Increased by approximately 5%.
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Payroll and Employee Benefits:RON97 million, up 4.6%.
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Advertising Investment:RON20.6 million, up 27.6% year-on-year.
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New Restaurants Opened:Four new restaurants, including three KFC units and one Cioccolatitaliani unit.
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Total Restaurants Operated:182 at the end of March 2026.
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Same-Store Sales - KFC Romania:Increased by 3% year-on-year.
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Same-Store Sales - KFC Italy:Declined by 5.4% year-on-year.
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Same-Store Sales - KFC Moldova:Declined by 9.8% year-on-year.
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Same-Store Sales - Pizza Hut:Declined by 3.2% year-on-year.
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Same-Store Sales - Taco Bell:Declined by 2.4% year-on-year.
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Delivery Sales:RON75.4 million, representing 20% of total group sales.
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Release Date: May 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Sphera Franchise Group SA ( BSE:SFG ) reported a 4.2% increase in consolidated sales for Q1 2026, reaching RON378 million, indicating a positive top-line growth.
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KFC Romania showed resilience with a 3% increase in same-store sales year-on-year, reflecting a recovery in consumer demand.
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Taco Bell emerged as the fastest-growing brand in the portfolio, with a 12.2% increase in revenue, driven by network expansion and strong traction among younger consumers.
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The company successfully opened four new restaurants in Q1 2026, expanding its footprint and demonstrating commitment to growth.
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Sphera Franchise Group SA ( BSE:SFG ) is diversifying its brand portfolio by adding wagamama, a recognized pan-Asian restaurant concept, which could offer long-term growth opportunities in the Romanian market.
Negative Points
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The foodservice industry faced challenges such as elevated inflation, cautious consumer behavior, and sustained pressure on operating costs, impacting overall performance.
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Pizza Hut experienced a 3.2% decline in sales year-on-year, highlighting ongoing challenges in driving traffic and maintaining momentum.
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KFC Moldova reported a weaker quarter with an 8% decrease in all-store sales, primarily due to the mandatory relocation of a restaurant.
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Total expenses increased by approximately 5%, slightly above the sales growth rate, due to inflationary pressures and network development costs.
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The company faced a temporary margin dilution due to the scaling operations of newly opened locations, impacting short-term profitability.
Q & A Highlights
Q: Food and material costs slightly improved as a share of sales in Q1 despite the inflationary environment. Is this improvement sustainable for the rest of the year? And how much room is left for procurement efficiencies? A: Calin-Viorel Ionescu, CEO: The better cost ratio in Q1 was due to procurement discipline, a favorable product mix, and operational optimizations. However, given the volatile inflationary environment in Romania, we will continue to maximize efficiencies through various initiatives, including renegotiations. We expect a normalization throughout the quarters, aligning with the budgeted overall cost of goods sold for 2026.
Q: Advertising expenses increased materially in Q1 as the group supported traffic generation and new restaurants. Should we treat Q1 advertising as a front-loaded investment? Or is this a new run-rate for 2026? A: Oana-Monica Eftimie, CMO: The increased advertising expenses in Q1 should be treated as a one-off investment. By the end of the year, advertising is expected to be 5% of sales.
Q: G&A expenses declined 10% year on year in Q1 and improved to 3.8% of sales, while the 2026 budget implies G&A expenses increasing by 8.4% for the full year. Should we treat the Q1 improvement as a sustainable efficiency gain? A: Valentin Budes, CFO: The Q1 improvement is due to a technical and accounting effect of the reversal of performance provisions for 2025. This will be reinvested in people throughout the year, normalizing the effect over the remaining quarters.
Q: After Q1, is management still comfortable with the 2026 budget for sales, normalized EBITDA, and normalized profit? A: Valentin Budes, CFO: Despite the volatile context and uncertainties, we remain committed to the values communicated and approved in the shareholder meeting for 2026. We believe we can navigate the current environment effectively.
Q: Can you explain the rationale for having a broad portfolio of new brands with a small number of units? Is this margin attractive or dilutive? A: Valentin Budes, CFO: The strategy is to enhance our portfolio by becoming a strong platform where various businesses can be efficiently integrated. While scale is important, it can be achieved through a combination of businesses without complicating operations. Each brand is intended to be accretive to the group's overall performance in both EBITDA and profitability.
Q: Can you comment on traffic versus ticket evolution for Q1 2026? A: Valentin Budes, CFO: Despite pressure on transactions across brands, we managed to offset this with a better average ticket, leading to positive figures for both same-store and total store sales in Q1.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
