Guzman y Gomez interim sales surge to $471m amid rapid store expansion

Guzman y Gomez (GYG) has served up a 31 per cent increase in global network sales to $471 million in the December half, with the Mexican quick-service restaurant chain’s existing stores adding to the momentum through double-digit growth.

The Sydney-based company opened 16 new restaurants in the six months to the end of December, boosting its global operations to 209 outlets.

While these openings boosted revenue by a third, existing stores managed to lift sales by 11 per cent which GYG attributes in part to its digital sales channel.

The company’s digital channel makes up 40 per cent of network sales, comprising delivery aggregators at 23 per cent and the app and web at 17 per cent. GYG’s app and web network sales were up 49 per cent from a year earlier.

GYG operates 183 restaurants in Australia, up from 171 at the end of FY23, with 121 of these franchised operations.

Revenue from its Australian operations rose 31 per cent to $439 million which delivered underlying EBITDA of $24.3 million, up 66 per cent from a year earlier.

GYG operated 26 restaurants internationally with 17 in Singapore, five in Japan and four in the US, where it began its offshore expansion in Chicago in 2020.

Singapore and Japan network sales rose 13 per cent to $27 million, while the US recorded 400 per cent growth to $5 million.

US growth reflects three new restaurant openings and 15 per cent growth in comparable sales as GYG’s says brand recognition continues to develop in the Chicago region where it operates.

“As we pass over 18 years of operation, our half-year results reflect the strength of the GYG brand and business both locally and abroad,” says GYG co-founder and co-CEO Steven Marks.

“With our innovative menu and diversified channel offering, we can meet our customers where they want and capture growing demand for real food, made fresh and using only the best ingredients.

“Our performance remained strong, underpinned by double-digit comparable sales growth across our businesses in Australia and overseas. The group also benefited from the addition of 16 new restaurants globally in 1H24, particularly restaurants with drive-thrus where we are building a market-leading position.”

GYG opened 13 new restaurants in Australia including 10 drive-thru outlets. It also closed one restaurant during the period.

The company says it has ‘ample room’ for new restaurant growth in Australia over the next two years or more, having identified 98 board-approved restaurants including 40 with development approvals, 37 of which have signed leases and a further 26 locations with DAs lodged.

Three years ago, Marks told Business News Australia of his ambitions to ultimately operate 500 to 600 stores in Australia, although that figure has since been upgraded.

Sales momentum has continued into the second half of FY24 with GYG reporting a record trading result for the beginning of calendar 2024.

In Australia, the business has delivered total year-to-date network sales growth of 29 per cent and comparable year-to-date network sales growth of 10 per cent in the six weeks to 18 February 2024.

GYG is expecting to achieve underlying EBITDA growth in Australia this financial year, driven by a further 12 new restaurant openings, with most of them drive-thru operations.

The company is targeting 30 to 40 new restaurants per year over the long term, with a weighting towards drive-thru outlets which offer ‘stronger unit economics and return on investment’.

Hilton Brett, co-CEO of GYG, says the company is reinvesting in the fast-food category which he describes as ‘ready for mass disruption on a global scale’.

“The quality of our food, our incredible guest experience, white space in Australia and globally as well as our restaurant economics are some of the best in the world,” says Brett.

“In Australia we have at least 800 restaurants to roll out which gives us an unbelievable growth runway for many years to come. We’re just getting started in the US and have substantial opportunity for growth in Singapore and Japan, with the rest of the world waiting for us.”