Guzman y Gomez keeps expansion on the menu despite increased US losses rattling investors | Business

Mexican-themed chain Guzman y Gomez plans to open no less than 15 eating places within the US regardless of doubling its losses on its “relentless” bid to broaden into the aggressive American market.Regardless of its struggles within the US, GYG recorded greater than $1bn in gross sales throughout its community for the primary time and greater than doubled its internet revenue to $14.5m within the 12 months to July – its first 12 months on the Australian Inventory Alternate (ASX).Australian buyers had been rattled despite the fact that Guzman y Gomez lifted its total income by 23% to $1.181bn, with GYG’s share worth plummeting by almost 20% by shut of commerce on Friday after it printed its yearly monetary outcomes.The corporate’s co-chief govt officers, Steven Marks and Hilton Brett, informed buyers their ambition was to “turn out to be the most effective and largest restaurant firm on the planet”.Enroll: AU Breaking Information emailMarks and Brett mentioned they had been dedicated to their North American growth and had been “relentlessly centered on demonstrating proof of idea” within the US.The duo mentioned every American restaurant would want to make no less than US$3m a 12 months so as to be sustainable and “whereas it should take time, we’re seeing momentum”.Guzman y Gomez misplaced A$13.2m on its US shops within the 12 months to 30 June, up from a $6.5m loss within the 2023-2024 monetary 12 months.There have been appreciable doubts over whether or not the Sydney-headquartered firm can crack the US market, which is notoriously troublesome for Australian meals retailers as a result of totally different tastes, provide chains and portion sizes.Throughout the 12 months, Guzman y Gomez added two city strip eating places to its community in Chicago, taking the full variety of eating places within the Illinois capital – the place the corporate is starting its foray into the American market – to seven.The corporate’s technique focuses on constructing density within the Chicago market by “increasing inwards from the suburbs” in a bid to “to deepen penetration and strengthen model presence”.In February, Marks conceded to buyers the corporate’s US gross sales weren’t “rising as quick as we’d like”.However, Guzman y Gomez plans to open two new US shops within the 2025-26 monetary 12 months and expects its losses within the American market to extend barely throughout the 12-month interval.skip previous publication promotionSign as much as Breaking Information AustraliaGet crucial information because it breaksPrivacy Discover: Newsletters could comprise information about charities, on-line advertisements, and content material funded by outdoors events. For extra info see our Privateness Coverage. We use Google reCaptcha to guard our web site and the Google Privateness Coverage and Phrases of Service apply.after publication promotionGuzman y Gomez co-CEO and co-founder Steven Marks rings the ASX bell as co-CEO Hilton Brett (left) mentioned they remained assured the chain may attain 1,000 shops. {Photograph}: Provided Morrow Sodali Pr/PR IMAGEMarks and Brett informed buyers they had been optimistic given it took them 12 years for his or her Australian eating places to common $40k per week in gross sales and one other seven years to achieve $100k.The corporate fared a lot better at dwelling over the previous 12 months, reporting community gross sales of almost $1.1bn in Australia, partially pushed by a rise in night-time and breakfast buying and selling with the elevated rollout of 24/7 shops.When it debuted on the ASX in June final 12 months, the corporate received over buyers by saying plans to extend the variety of its Australian shops from fewer than 200 to greater than 1,000 – a determine chosen to rival McDonald’s – and construct its worldwide community.Marks and Brett mentioned Guzman y Gomez was “on observe” to open 40 new eating places in Australia a 12 months inside 4 years and remained assured they might attain 1,000 shops.The corporate had 256 eating places all over the world as of 30 June after opening 39 new eating places within the 12 months prior, together with 32 in Australia, 4 in Singapore, one in Japan and the 2 new US shops.