Kyochon F&B Reports Q1 Sales of 123.4 Billion KRW, Down 1% Year-on-Year

Operating Profit Drops 50.6% to 5.3 Billion KRW in Q1
Impact of Prolonged Avian Influenza and Middle East Instability
Rising Raw Material Costs and Supply Issues Affect Results

Kyochon F&B, the operator of Kyochon Chicken, announced on the 12th that its consolidated sales for the first quarter of this year were approximately 123.4 billion KRW, with an operating profit of 5.3 billion KRW, based on preliminary figures.

Sales decreased by 1% compared to the same period last year, while operating profit dropped by 50.6%. Kyochon F&B explained that the prolonged avian influenza (AI) outbreak during the winter season, instability in the Middle East, and a strong Korean won led to raw material supply issues and increased costs, which in turn affected both sales and profitability in the first quarter of this year.

Unstable raw material supplies due to the prolonged winter AI outbreak and support for franchise-exclusive cooking oil contributed to the sales decline. However, the impact was limited by the normalization of operations at global stores in the United States and China, as well as the expansion of sales in new business sectors. The drop in operating profit was the result of increased costs for raw and subsidiary materials, higher production costs, and a rise in selling, general, and administrative expenses such as transportation and advertising.

A representative from Kyochon F&B stated, "In the second quarter, we plan to focus on stabilizing the supply of raw materials for our key products to lay the foundation for sales growth. In particular, we will strengthen marketing efforts to respond to factors that drive up chicken consumption, such as Family Month, sports viewing demand, and the start of the summer peak season, to maximize both sales and operating profit."