Highlights

  • Guzman y Gomez (ASX:GYG) reported record FY26 underlying results, with Revenue up 21.8% to $540.4 million and underlying EBITDA rising 28.7% to $85 million.
  • The company exited its loss-making US operations, resulting in restructuring costs that weighed on statutory earnings.
  • Australian operations remained the key growth driver, with 32 net new restaurants added and comparable sales growth continuing.
  • Investors are focused on store expansion, delivery growth, automation initiatives and whether valuation expectations can be maintained.

Guzman y Gomez (ASX:GYG) entered FY27 after a year of significant strategic change, with the company exiting its US operations while delivering record underlying performance across its core markets. The result highlighted the strength of the Australian business, supported by restaurant expansion, delivery growth and technology investments. However, the next phase will depend on disciplined expansion and whether the company can maintain growth expectations at its current valuation.

Drawing a line under America

The defining strategic decision of Guzman y Gomez's FY26 was the closure of its loss-making US operations.

In May 2026, the company exited the US market, with management describing the decision as difficult but necessary to focus resources on higher-return opportunities.

The operational closure costs were within the previously indicated range, but additional asset impairments and lease-related charges increased total restructuring costs to $67.3 million.

These charges resulted in a statutory group net loss of $26.7 million for FY26.

However, investors largely focused on the underlying performance of the remaining business, suggesting the market viewed the US exit as a reset rather than a reflection of the broader operating model.

A record year beneath the statutory loss

Excluding the discontinued US operations, FY26 represented a strong year for Guzman y Gomez.

Network sales increased 17.9% to $1.38 billion.

Revenue rose 21.8% to $540.4 million.

Underlying EBITDA increased 28.7% to $85 million, while underlying net profit grew 29.7% to $53.4 million.

Statutory net profit excluding the US operations increased 31.6% to $40.6 million.

Operating cash flow improved 33.4% to $76.4 million.

The company also extended its share buyback by up to $100 million and declared a full-year Dividend of 48 cents per share, including a 14.4-cent special dividend.

The payout represented approximately 90% of underlying earnings.

The decision to return Capital while continuing network expansion reflects management confidence in the underlying Australian business.

The numbers behind the momentum

Australia remained the main growth engine.

GYG added 32 net new restaurants during FY26, taking the Australian network to 255 locations.

The company also operated 24 locations in Singapore and five in Japan, bringing the global network above 280 restaurants.

Growth was supported by improving store Economics rather than expansion alone.

Australian comparable sales growth reached 6.6% in the March quarter, while management indicated early FY27 trading was tracking ahead of its mid-single-digit comparable-sales expectations.

Network restaurant margins improved to around 20.3%.

Underlying EBITDA Margin expanded to 6.2% of network sales from 5.7% a year earlier.

Management highlighted Operating Leverage within the model, while maintaining a focus on customer value by keeping price increases below cost inflation.

What is driving the stock

Two strategic shifts are supporting the Investment case.

The first is delivery.

The exclusive Uber Eats Partnership launched in February 2026 has become an important sales channel, with delivery accounting for around 27% of sales.

The second is technology.

GYG has expanded automation across its operations through AI-powered ordering systems, digital food-preparation tools, temperature monitoring and enhanced food-safety systems.

Future initiatives include vision AI and smart-scale technology.

These investments are designed to improve consistency, efficiency and restaurant-level economics as the network expands.

The market reaction following FY26 results showed that investors were willing to look beyond the US exit and focus on the underlying growth profile.

The growth story

The long-term opportunity remains centred on Australian expansion.

GYG's Australian development pipeline expanded by 62 sites to 117 restaurants, with around 85% planned as drive-through locations.

Management has outlined a long-term ambition to reach 1,000 restaurants domestically.

FY27 guidance includes 35 new Australian restaurants, mid-single-digit comparable-sales growth and an underlying EBITDA margin of 6.7–6.9% of network sales.

The Franchise model is also expanding.

During FY26, the company added 19 new franchise locations and 10 new franchisees.

A larger franchise network can allow continued growth while reducing the amount of capital required directly from the company.

If GYG maintains positive comparable-sales growth, expands margins and executes store openings effectively, the Business has significant room to grow.

The risks

The US exit highlights the risks associated with international expansion.

While the decision improved capital discipline, it also demonstrated that the business model may not translate equally across different markets.

Valuation remains another important consideration.

After recovering from previous weakness, the share price reflects significant expectations for continued growth and execution.

Any slowdown in comparable-sales growth or margin expansion could affect investor sentiment.

Delivery growth also introduces new considerations.

A larger proportion of sales through third-party platforms such as Uber Eats can increase exposure to commission costs and changes in delivery economics.

The company also faces broader risks including wage inflation, food costs, property availability and labour-market conditions.

Executing a rapid store rollout in a competitive environment remains a significant operational challenge.

What Investors Should Watch Next

The next major checkpoint will be the FY27 first-half result in early 2027.

Investors will be watching whether early FY27 comparable-sales momentum continues and whether margins move toward the targeted 6.7–6.9% range.

Other important indicators include:

  • progress against the 35-store opening target;
  • delivery mix and economics;
  • returns from AI and automation investments;
  • performance in Singapore and Japan;
  • franchise expansion.

These factors will determine whether GYG can continue growing beyond its Australian base.

The Bottom Line

Guzman y Gomez (ASX:GYG) delivered a FY26 result where a difficult US exit was offset by strong underlying performance in its core markets.

Revenue growth, expanding margins, store expansion and technology investments support the company's longer-term growth strategy.

The key issue now is execution.

GYG must demonstrate that its Australian growth model can continue scaling while maintaining restaurant economics and managing valuation expectations.

The business has moved beyond the immediate disruption of the US exit, but the next phase will require consistent delivery across sales growth, new restaurants and profitability.