Mexican fast food chain Guzman Y Gomez smashes annual profit forecast (updated)

Guzman y Gomez

27/08/2024 02:05

(Updates with details on results from paragraph 2 onwards,
share moves)
       Aug 27 (Reuters) - Mexican fast-food chain Guzman Y
Gomez  GYG.AX  smashed annual underlying profit expectations on
Tuesday, bolstered by strong restaurant sales and network
expansion across Australia, but kept its forecast unchanged for
fiscal 2025.
    Shares of the Sydney-based startup fell as much as 9.2% to
A$32.54 in early trade, while the benchmark stock index  .AXJO 
was largely unchanged.
    In its first earnings report since going public in June,
Guzman Y Gomez (GYG) reported a pro forma post-tax net profit of
A$5.7 million ($3.86 million) for the year ended June 30, ahead
of its prospectus view of A$3.4 million and a Visible Alpha
consensus of A$2.1 million.
    "Strong sales growth and ongoing margin expansion resulted
in significant growth in earnings, exceeding prospectus
forecasts," co-CEO Steven Marks said in a statement.
    The quick service restaurant chain maintained its prospectus
forecast of A$6.0 million underlying profit for fiscal 2025,
marginally above the prior fiscal and below a Visible Alpha
consensus of A$8.4 million.
    The firm put up A$335.1 million of new stock in its initial
public offering - a highlight for the Australian equity capital
markets this year, which have been languishing in a deep slumber
over two years due to high interest rates and inflation.
    GYG has 220 outlets in total and most of them are in
Australia. It recorded global network sales of A$959.7 million
in fiscal 2024, a more than 26% growth from the prior year.
    In the first seven weeks of the current fiscal year,
like-for-like sales in Australia were above its expectations at
7.4% on strong home deliveries and demand for cheaper food
options.

($1 = 1.4784 Australian dollars)

 (Reporting by John Biju and Aaditya Govind Rao in Bengaluru;
Editing by Tasim Zahid and Subhranshu Sahu)
 ((Aaditya.GovindRao@thomsonreuters.com;))