Double-digit growth for Guzman y Gomez as sales hit $759m

Double-digit growth for Guzman y Gomez as sales hit $759m

After his resignation was announced in May, GYG founder and CEO Steven Marks insists 'he isn't going anywhere'.

Australian Mexican food chain Guzman y Gomez (GYG) has reported a 32 per cent lift in global network sales to $759 million in FY23, with the extra sauce coming from almost 50 new restaurant openings worldwide as well as same-store growth of 15 per cent.

Underlying group earnings surged by 56 per cent to $32 million, but one-off costs of setting up in the US where the business is running at a loss pushed results into the red with a negative $2.27 million statutory result, compared to a $3.91 million group profit in FY22.

Guzman y Gomez founder and CEO Steven Marks, who in May announced he would be resigning with the private equity-backed group searching globally for a replacement, says the company experienced a 'phenomenal' 2023 with more growth on its way in the year ahead.

"As we look to the year ahead, I can promise you that we are going to be bigger and better than ever. We have a long runway of growth ahead of us, and plan to open more than 30 restaurants across Australia next year," he says. 

This compares to 22 new locations domestically and 27 openings abroad in FY23.

Guzman y Gomez now has 194 restaurants worldwide of which 171 are in Australia with the largest number in NSW at 65 locations, scraping just ahead of Queensland with 64.

For comparison, the chain's Australian footprint is about 40 per cent of the 444 Hungry Jack's venues and less than a quarter of the 757 Domino's (ASX: DMP) stores, but GYG is aiming for more than 40 domestic openings each year over the medium term.

In the recent financial year, Guzman y Gomez has not opened as many stores as planned due to delays in obtaining development approvals from councils, and construction and supply chain disruptions.

Australian sales were up roughly in line with overall growth at 31 per cent to reach $703 million, of which 17 per cent was generated by the GYG app and website - up five percentage points over the year. General and administrative costs increased to $45 million, up 41 year-on-year, reflecting an increased pace of hiring in Hola Central, GYG’s head office, to support the growth of the business.

GYG reported a 35 per cent increase in sales in Singapore and Japan to hit a combined $50 million, with a net increase of two new restaurants in the Singapore to take its store count to 16, and four venues in total in Japan.

Network sales doubled in the US to $6 million with two drive-thru restaurants opened in the greater Chicago area, bringing the total to three corporate restaurants. A fourth US restaurant is expected to open in Buffalo Grove, a 45-minute drive northwest of Chicago, in October.

"I am so proud of our team, and we are as dedicated and hungry as ever to be building the best restaurant company in the world. Our obsession with people and food is the soul of GYG, and I'd like to say thank you to everyone in the GYG community for helping us achieve record global sales in FY23," Marks says.

"We are here to build the best restaurant company in the world, and FY24 will bring us the opportunity to innovate across all parts of our menu, drive more sales through our digital channels and sustainably grow comps across our network.

"We cannot wait to continue to delight millions of guests across the world by serving fresh, hot, healthy, and delicious food."

Employing more than 10,000 people, GYG's last valuation was $1.5 billion in 2022, and its institutional shareholders include TDM Growth Partners, Barrenjoey, Aware Super, Athletic Ventures and Point King Capital. Barrenjoey bought its share in May last year from Magellan Financial Group (ASX: MFG), which had made its purchase from Marks in 2021.

When asked today about the global search for his replacement as CEO, Marks told Business News Australia it would take time.

"I am feeling great, I am still leading GYG with the same energy I had on day one," he says.

"As I said at the time, I am not leaving GYG but this is a big business now, growing rapidly and I need someone to help scale this amazing business. In my ideal world, I would be able to focus on my strengths which are in brand and food.

"Finding our next CEO is going to take some time so, until that happens, I am here and not going anywhere."

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