Fast-food chain Guzman y Gomez GYG.AX announced on Friday a half-year profit above forecasts, but weakness in US sales amid a challenging consumption environment sent its shares down 16% to a record low.
Guzman y Gomez (GYG) made its debut on the ASX in June 2024, marking the largest listing in Australia in three years. The company raised A$335.1 million (US$236.45 million) in the third-largest IPO in five years, giving it a market value of A$2.2 billion.
Seen as an indicator of sentiment towards the Australian fast-food sector, GYG’s ambitious expansion plans in the US in the face of weak sales, price increases, and consumer spending moderation have angered investors.
GYG’s stock dropped 16.5% in early trading to A$17.00, about 23% lower than its A$22 IPO price and 63% lower than its record of A$45.99 a year ago.
“The company is performing well, but not as fast as the market expected,” wrote Citi analysts.
The US network sales surged 67% to A$8.2 million in the first half but fell short of the Visible Alpha consensus of A$9.2 million. Bad weather in the Chicago region in December also impacted comparable sales growth.
GYG expects US losses to increase slightly through June, compared to a A$13.2 million loss in 2025. It also noted short-term sales dynamics pressure following the end of its partnership with DoorDash and the switch to Uber Eats.
The Australian segment, GYG’s biggest sales contributor, reported network sales of A$673.6 million (US$475.29 million) in the first half, up 17.5% from last year, and projected annual profit margins up to 6.2%, versus 5.7% last year.
The fast-food chain operator reported a net profit after tax of A$10.6 million for the six months ending December 31, higher than the Visible Alpha consensus of A$9.2 million and last year’s A$7.3 million.
The group’s network sales rose 18% to A$681.8 million, though below the Visible Alpha consensus of A$687.3 million.
The company declared a dividend payout of 7.4 Australian cents per share.
(1 USD = 1.4172 Australian dollars)
