Mexican restaurant business Guzman Y Gomez (ASX: GYG) has served up a strong set of numbers in the first half of the 2025 financial year (H1 FY25) showcased by a 23 per cent year-on-year improvement in global network sales.
Sales and earnings jump
All up, the company generated $578 million in global sales during the half-year, with management attributing this sturdy performance to its operational execution, network expansion, and strong demand for the group’s clean and fresh Mexican-inspired menu.
Revenue of $212.4 million was also up by 27 per cent from twelve months prior.
In turn, operating earnings (EBITDA) of $32 million in H1 FY25 saw a robust 28 per cent boost from the previous corresponding period, whilst net profit after tax (NPAT) of $7.3 million nearly doubled.
In its dominant Australian market, Guzman y Gomez achieved $573 million in total sales which represents 9.4 per cent growth from the same time last year. Here, delivery outperformance, impactful marketing, and demand for value menu items are cited as key drivers.
The company also reported solid sales growth in its emerging geographic segments of Singapore and Japan, with gains of about 36 per cent and 9 per cent respectively.
Network expansion
Guzman y Gomez opened 19 new restaurants during the half-year to take its tally to 239 outlets operating across Australia, Singapore, Japan, and the US.
Its global network has now risen at a 15 per cent capital annual growth rate since operating 62 restaurants in FY15. The group has also developed a pipeline of more than 100 future restaurants which could drive growth.
Bottom line strength
Guzman y Gomez ended December with $274.5 million in net cash and term deposits and no debt. Management believes this balance sheet strength provides flexibility for the company’s planned restaurant expansion.
Guzman y Gomez founder and co-chief executive officer, Steven Marks, commented:
“GYG’s first-half 2025 performance and growth in sales and earnings showcases our guest’s love for our food, but also the strong execution of our strategy and our unwavering commitment to exceptional guest experience…
We have more than 100 future restaurants in our pipeline, all in AAA locations, positioning us well for solid expansion in the coming years.”
Positive outlook
Management noted that Australian comparable sales growth of 12.2 per cent in the first seven weeks of H2 FY25 has surpassed expectations. It projects net profit after tax for FY25 to top its previous forecast from before the company listed on the ASX.
Moving forward, Guzman y Gomez is focused on a string of strategic priorities including a restaurant roll out in Australia, lifting margins, improving its digital offering, driving growth in Singapore and Japan, and expanding its brand awareness to fuel sales in the US.