Guzman y Gomez (ASX:GYG) shares jumped to a 10-month high after the fast-food group delivered a stronger-than-expected trading update and a larger-than-anticipated dividend, although the stock quickly surrendered almost half of its early gains.
GYG shares were 7.8% higher at $25.83 after climbing as much as 13% to $27.00 earlier in the session, as investors responded to the company’s FY26 performance and outlook for further restaurant expansion.
The results showed network sales from continuing operations reached $1.4 billion, up 17.9% on FY25, while comparable sales increased 5.3%. Underlying EBITDA rose 28.7% to $85 million as the group benefited from higher sales and operating leverage.
GYG also returned $120 million to shareholders during FY26 through dividends and share buybacks.
Restaurant pipeline supports growth ambitions
Investor attention was also focused on GYG’s expansion plans, with its Australian real estate pipeline increasing to 117 sites at the end of FY26, around 85% of which are expected to be drive-through restaurants.
The company said it has the infrastructure and visibility to deliver around 40 restaurant openings annually as it works towards a longer-term ambition of around 1,000 Australian restaurants.
GYG opened 32 restaurants in Australia and three in Singapore during FY26, taking its Australian network to 255 restaurants.
Restaurant economics remain strong
GYG reported an overall restaurant network margin of 20% during FY26, including margins of 22% for drive-through locations and 18% for strip stores.
Average unit volumes were $6.9 million for drive-through restaurants and $5.0 million for strip locations.
The group ended FY26 with 284 restaurants across Australia, Singapore and Japan after opening 35 locations during the year.
GYG has now completed its exit from the US after deciding the operations would require significant additional investment and time to reach its targeted financial hurdles.