By Sneha Kumar
(Reuters) -Mexican-themed quick meals chain Guzman Y Gomez reported annual revenue forward of expectations on Friday, however rising U.S. expansion-related prices and a subdued begin to the brand new enterprise yr in Australia despatched its shares down 21%.
Guzman y Gomez (GYG) made its ASX debut in June 2024, marking the most important itemizing in Australia in three years. Thought to be a bellwether for the nation’s IPO market, its efficiency can also be considered as a yardstick for the quick-service restaurant business.
The corporate posted an working lack of A$13.2 million ($8.48 million) for its U.S. division in 2025 and flagged that the losses are anticipated to widen and margins to come back beneath stress within the present fiscal yr because it embarks on growth within the better Chicago space.
“This funding … is anticipated to offset ongoing enhancements within the profitability of present eating places, and consequently U.S. losses are anticipated to extend barely in FY26,” the corporate stated.
Community gross sales in Australia rose 3.7% within the first seven weeks of the present enterprise yr, sharply decrease than the 7.6% progress forecast for the primary half by Seen Alpha consensus.
Shares of GYG plunged 21% to a lifetime low of A$22.740, a number of pips shy of their problem worth of A$22 apiece. The inventory marked its worst intra-day session on document.
Craig Sidney, a senior funding advisor at Shaw and Companions, estimates GYG is “extremely priced, so there’s a view that they have to realize very robust progress with a purpose to substantiate the share worth”.
“So something that barely misses on this setting is being bought down fairly closely.”
In Australia, strong demand for its in style breakfast menu lifted gross sales 22% to a document A$1.09 billion within the yr ended June 30, whereas gross sales in its secondary markets rose as properly: up 40% in Singapore and 16% in Japan.
That propelled its full-year web earnings to A$14.5 million, greater than double of the A$5.7 million it earned final yr, and forward of its personal and market expectations.
The corporate additionally introduced its first dividend payout of 12.6 Australian cents per share, citing robust steadiness sheet and money circulation era.
For the present enterprise yr, GYG forecast working earnings from its Australia section, which incorporates its operations in Singapore and Japan, to develop as much as 6.3%, in contrast with a 5.7% progress in 2025.
($1 = 1.5567 Australian {dollars})
(Reporting by Sneha Kumar in Bengaluru; further reporting by Sameer Manekar; Modifying by Alan Barona and Sherry Jacob-Phillips)