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Mexican restaurant chain Guzman Y Gomez (ASX: GYG) has affirmed it remains on track to exceed its prospectus net profit forecasts for FY25 after delivering a strong performance in the third quarter, led by the company’s key Australian market.
The Sydney-based company, which also has operations in Singapore, Japan and the US, posted a 23.6 per cent increase in network sales to $289.5 million as the company reported growth across all of its geographic regions during the March quarter.
Australian sales accounted for $267.6 million of the total, but in percentage terms the Singapore operations grew the fastest with sales surging 33.8 per cent compared to a year earlier to hit $16.6 million.
Sales growth across the group was aided by 31 restaurant openings in Australia so far in FY25, including 18 franchise and 13 corporate stores which included 21 drive thru locations.
GYG opened three new restaurants in Australia and two in the US during the March quarter.
Among the key initiatives supporting growth has been the company’s breakfast menu as well as new menu items.
“Strong operational and marketing initiatives during the quarter included the introduction of a new menu item, Street Corn, the expansion of 24/7 trading and the continuation of the Good Mornings Start with GYG campaign,” says the company.
“GYG’s long-standing commitment to ethically sourced, high-quality ingredients continued in the quarter with the launch of the Clean is the New Healthy campaign in the US.
“In Australia this ongoing commitment has continued into the start of Q4, with a new marketing campaign highlighting GYG’s 100% Free Range Chicken.”
GYG says comparable sales growth in Australia continued across all channels, dayparts, formats and ownership types.
“Daypart growth was a highlight during the quarter, with an acceleration of sales growth in breakfast and after 9pm trading,” says the company.
“In the US segment, network sales increased during the quarter, largely due to the opening of two new restaurants.”
GYG has affirmed corporate restaurant margins of about 17.8 per cent in Australia, a franchise royalty rate of 8.3 per cent and an administrative costs-to-network sales ratio of 6.7 per cent.
“Overall, GYG expects to exceed its FY25 NPAT prospectus forecast,” says the company.
The prospectus, issued last year ahead of GYG’s $242.5 million capital raising and listing on the ASX in June, had forecast net profit after tax of $6 million for the current financial year from forecast revenue of $428.2 million from corporate sales and royalties.
The company posted a $7.3 million net profit after tax in the first half of FY25 and at the time of the announcement in February had forecast it was on track to beat its prospectus forecast.
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