Key facts
- Guzman y Gomez reported a 30% increase in annual profit.
- Australian network sales grew 17.9% to A$1.4 billion for the year ended June 30.
- The company's shares reached their highest level in nearly a year.
- Underlying net profit after tax was A$53.4 million, up from A$41.2 million.
- A net loss after tax of A$26.7 million was recorded due to discontinued U.S. operations.
Mexican-themed fast-food chain Guzman y Gomez reported a significant increase in annual profit, largely driven by robust sales growth in its Australian operations. The company's network sales in Australia, which also encompasses Singapore and Japan, rose by 17.9% to A$1.4 billion for the fiscal year ending June 30. This segment has become the company's primary growth driver following its exit from the U.S. market in May due to underperformance.
While comparable sales growth in Australia was 5.3%, in line with analyst expectations, Citi highlighted that this growth was volume-driven rather than price-driven, indicating a higher quality of growth compared to some peers. The company's underlying net profit after tax increased to A$53.4 million from A$41.2 million in the prior year. Guzman y Gomez also declared a final dividend of 40.6 Australian cents per share, exceeding consensus estimates.
Following the positive results, the company's shares surged as much as 12.6% to A$27.00, reaching their highest point in nearly a year, while the broader S&P/ASX 200 index saw a slight decline. However, the company reported a net loss after tax of A$26.7 million, a reversal from a profit of A$14.5 million in the previous year, primarily due to a substantial A$67.3 million loss from its discontinued U.S. operations.