Guzman y Gomez’s (GYG) first-quarter update reveals comparable sales growth in Australia of 4 per cent, according to RBC Capital Markets analyst Michael Toner. While this represents an increase from the 3.7 per cent recorded in the first seven weeks of the quarter, it remains below expectations. Toner noted that the result is under RBC’s first-half forecast of 4.83 per cent and the market consensus of 5 per cent, indicating that a substantial acceleration in second-quarter sales is necessary to meet existing forecasts. Guzman y Gomez is a fast-food chain specialising in Mexican cuisine. The company operates and franchises restaurants across Australia, Asia, and the United States.
US comparable sales growth for GYG reached 6.7 per cent, exceeding RBC’s 5 per cent forecast but falling short of the consensus estimate of 9.1 per cent. Overall network sales experienced an 18.5 per cent increase, aligning closely with anticipated figures. Guzman y Gomez reaffirmed its FY26 guidance and anticipates opening 17 new restaurants during the first half of the year. This figure is slightly ahead of RBC’s estimate of 16, yet modestly below the consensus forecast of 18.
Toner described the $100 million buyback, announced for the second quarter, as “unexpected” considering the company’s capital-intensive growth pipeline. He also noted that the buyback is “relatively small”, representing approximately 3.5 per cent of issued capital. Despite these observations, shares in GYG experienced a slight increase of 0.2 per cent in afternoon trading. Investors are closely watching to see if the company can boost sales growth in the coming months.
