Guzman y Gomez Shares (GYG) Make New Low: FY25 Results, First Dividend

Guzman y Gomez shares (ASX: GYG) plummeted to a low of A$22 before closing the week at A$23.70, a 18.19% drop, despite reporting robust FY25 financial results and declaring its first-ever dividend. The market’s negative reaction underscores concerns about slowing comparable sales growth and escalating losses in the U.S. expansion.

The Mexican fast-food chain’s stock faced heavy selling pressure following the earnings release. The GYG share price decline reflects investor apprehension regarding the sustainability of its growth trajectory and the impact of international expansion costs.

For the year ending June 30, 2025, Guzman y Gomez reported network sales of A$1.18 billion, a 23% increase year-over-year. Revenue climbed 27.4% to A$436 million, while earnings before interest, tax, depreciation, and amortization (EBITDA) surged 45.5% to A$65.1 million. Net profit after tax (NPAT) jumped 151.8% to A$14.5 million, enabling the company to announce a maiden fully-franked dividend of 12.6 cents per share.

However, comparable sales growth figures have sparked concern. While Guzman y Gomez reported a 9.8% comparable sales growth across Australia in FY25, the first seven weeks of FY26 have shown a slowdown to an annualized 3.7% across Australia, Singapore and Japan. The company anticipates sales momentum to improve throughout the year, citing “menu innovation, daypart expansion, operational excellence, marketing and digital initiatives.”

The company’s expansion into the U.S. market is also proving costly. Network sales in the U.S. increased 13% to A$12.2 million, but the segment’s underlying EBITDA loss doubled to A$13.2 million.

Analysts have weighed in on the company’s prospects. RBC Capital Markets initiated coverage with an “underperform” rating, citing the company’s high valuation and the early stage of its U.S. operations. Investors are also anticipating the release of escrowed shares, which could further impact the stock price.