Guzman y Gomez exits US market, boosts Australia growth outlook

The Guzman y Gomez Ltd (ASX: GYG) share price is in focus today after the company announced the decision to exit the US market, while lifting its Australia Segment EBITDA guidance.

What did Guzman y Gomez report?

• Exited the US market and ceased trading Chicago restaurants effective immediately
• Australia Segment underlying EBITDA for FY26 expected to be approximately $85 million, up 29% on prior year
• Planned 32 new restaurant openings in Australia this financial year
• One-off US exit costs expected to impact FY26 P&L by US$30–40 million, with cash outflows not exceeding US$15 million
• No expected impact on the final dividend for FY26

What else do investors need to know?

Guzman y Gomez decided to exit the US market after its business there failed to meet key financial performance targets, despite solid work by the local team. The board remains confident in the strength and future opportunity of its Australian business, supported by a robust pipeline of new sites.

International expansion efforts will now centre on master franchise partners in Singapore and Japan. Both partners are delivering strong sales growth, with Singapore recently opening its 24th restaurant. The company still believes disciplined global expansion remains possible in the right markets.

What did Guzman y Gomez management say?

Founder and Co-CEO Steven Marks said:

I have always been confident in the differentiation of our food and guest experience, however this was not translating to an improvement in sales momentum. Having spent the last 3 months in the US, I realised this was going to take significantly more time and capital than we had expected. In assessing the trajectory of the current network, the Board and I have concluded that the business is unlikely to deliver the performance that would justify continued investment of shareholder capital.

What’s next for Guzman y Gomez?

Looking ahead, the company is focusing its efforts and capital on expanding its successful Australian network, targeting continued strong growth and world-class economics. GYG’s long-term goal remains to reach 1,000 restaurants in Australia, with segment EBITDA at 10% of network sales.

GYG affirmed its commitment to international growth through established partners, especially in Asia, while taking a disciplined and strategic approach to entering any new markets in the future.

Guzman y Gomez share price snapshot

Over the past 12 months, Guzman y Gomez shares have declined 42%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 3% over the same period.

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The post Guzman y Gomez exits US market, boosts Australia growth outlook appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.