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Guzman y Gomez, the renowned burrito chain, recently encountered a financial setback, seeing its half-year earnings fall short of expectations, resulting in a substantial multimillion-dollar loss. The aftermath of these results was palpable, as its stock value on the Australian Securities Exchange (ASX) plummeted by approximately 10 percent. With the company’s market capitalization hovering around $2.1 billion, this decline equates to a significant blow exceeding $200 million.
Despite the disappointment, there was a silver lining in the form of sales growth. The chain reported an 18 percent increase in sales compared to the same period in the previous financial year, although analysts were hoping for a slightly higher 19 percent growth. Nevertheless, Guzman y Gomez viewed these figures in a positive light, emphasizing the strength of their sales and the successful launch of 17 new restaurants worldwide, which underscores their ongoing expansion strategy.
CEO Steve Marks expressed optimism about the company’s trajectory, stating, “We continue to have extremely healthy restaurant economics and share our success with our franchisees.” This statement reflects the company’s commitment to maintaining robust financial health and fostering a collaborative relationship with its franchise partners.
However, Guzman y Gomez said the results were positive, pointing to growing sales and 17 new restaurants opened around the world, keeping its expansion plans on track.
“We continue to have extremely healthy restaurant economics and share our success with our franchisees,” CEO Steve Marks said.
“GYG achieved solid sales momentum and earnings growth during the half, driven by… our team’s consistent execution on core strategic and operational initiatives.”
The company expects to open 32 more restaurants in Australia in the current financial year.
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