Holy guacamole! Guzman Y Gomez smashes sales in first quarter, expects to beat full-year prospectus forecast
Newly listed Mexican fast food empire Guzman Y Gomez says it’s likely to beat prospectus forecasts for the full year after dishing up a super-sized first quarter result aided by customers seeking out more value options.
The results, released on Thursday, were led by “above average” sales in Australia of $260.2 million for the three months to the end of September — an impressive 19 per cent improvement on the $214.8m it recorded for the same period a year earlier.
Sales for the quarter in Singapore ($13.6m, up from $11.4m) and Japan ($2.5m, up from $2m) also added to the upbeat sentiment. The US was the only market to report a fall — $2.6m, down from $2.7m a year ago when higher sales were driven by new store opening.
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By continuing you agree to our Terms and Privacy Policy.“Comparable sales growth in the Australia segment has been above expectations, driven by strong delivery performance, successful execution of the Clean is the New Healthy campaign and guest demand for value menu items such as the $12 Chicken Mini Meal,” the company said.
“Overall GYG expects to meet its prospectus forecasts for the 2025 financial year, including the opening of 31 new restaurants in Australia.”
Guzman Y Gomez was founded in 2006 in Sydney’s inner west by two New Yorker friends Steven Marks and Robert Haza, who have grand ambition of opening 1000 outlets in Australia over the next 20 years.
They currently have 199 across the country, and another 27 spread throughout Singapore, Japan and the US.
Guzman Y Gomez listed on the Australian Securities Exchange at the end of June and its shares closed out on debut at an eye-popping $30 — well above the $22 issue price that had initial valued the company at $2.2 billion.
The stock closed trade on Wednesday at $38.63.
But many market watchers have long been questioning its lofty valuation, with Goldman Sachs analyst Elijah Mayr last week initiating a sell rating.
He citing the fast food chain’s “overly ambitious long-term store expansion profile that has no recent successful precedent in the Australian market” among his concerns.
“(The) stretched valuation has, inappropriately in our view, been pegged to the highest growth US-peers without taking into consideration the market differences and risks associated with an accelerated store expansion,” Mr Mayr told investors in a note on Thursday.
