Retail Food Group Narrows FY26 Guidance as Transformation Savings Accelerate

Retail Food Group (ASX: RFG) has lowered the top end of its FY26 underlying earnings guidance range as challenging trading conditions weigh on network sales despite faster than expected savings from its transformation program.

The company now expects to report FY26 underlying EBITDA of $20 million to $21m, compared with its previous guidance range of $20m to $24m.

The revised range reflects unaudited management accounts for the 10 months to 30 April and forecast performance for May and June.

RFG also confirmed the first Australian Firehouse Subs restaurant remains on track to open this month at Westfield Mount Gravatt in Brisbane.

Operational Reset Continues

Retail Food Group has lifted expected FY26 cost rationalisation savings to between $2.3m and $2.5m, compared with the previous forecast range of $1.2m to $1.8m.

The company left its FY27 anticipated savings range unchanged at $5m to $7m.

Operational enhancement work remains on track across marketing, franchise engagement, and procurement.

The company has established “back to basics” marketing strategies across its core brands and developed 12-month rolling promotional calendars for FY27.

A reset of the operations team is under way, with the company targeting stronger franchise partner engagement and improved store sales and profitability.

Initial Feedback Positive

Executive chair Peter George said the work had successfully right-sized the organisation, and that feedback on the company’s initiatives had been positive.

“Trading conditions remain difficult for our Franchise Partners, and we have responded by focusing our marketing activity on simple, value-led campaigns designed to reconnect with core customers, drive transaction growth, and stabilise customer count performance,” Mr George said.

“Our use of more scalable and efficient campaigns, focused on core product ranges and frequency-driving occasions, is a key element of our ongoing transformation agenda, which is ultimately focused on supporting our Franchise Partners as they navigate these challenging conditions”.

RFG has also completed a procurement and supply chain review, with outlet operating cost saving opportunities identified and now being pursued.

The company expects to deploy a brand aligned leadership model in the first quarter of FY27 to better integrate network marketing and operational support while increasing accountability at brand level.

Trading Conditions Remain Difficult

Retail Food Group recorded a 4.8% fall in core brand network sales for the first 20 weeks of the second half compared with the prior corresponding period.

Core brand same store sales fell 0.8% over the same period, with the company pointing to difficult retail conditions, recent interest rate increases, rising inflationary pressures and low consumer confidence.

The network sales decline was largely driven by reduced customer count from café, coffee and bakery outlet closures.

The café, coffee and bakery segment includes Donut King, Gloria Jean’s, Brumby’s Bakery, Beefy’s Pies, Michel’s Patisserie, Café 2U, and CIBO Espresso outlets.

Wholesale coffee price increases implemented in March improved coffee input procurement and the contribution from the company’s Türkiye supply hub had also influenced the guidance outlook.

Firehouse Launch Nears

RFG expects the first Firehouse Subs restaurant in Australia to open in June, marking a key milestone in its partnership with Restaurant Brands International.

The company said the launch followed a significant work program that included the establishment of a domestic supply chain.

Lease negotiations are progressing for additional sites as Retail Food Group works toward its broader Firehouse Subs rollout schedule.

Mr George said the company would enter FY27 with a more efficient cost base, a refreshed approach to driving network performance, and stronger alignment across marketing and operational functions.

“We therefore consider the 2H26 will represent an earnings inflection point and that the many positive initiatives implemented or in development will contribute to a stronger FY27,” he added.

Retail Food Group expects to release its FY26 results in late August.