How Guzman y Gomez’s Network Expansion Fuels 23% Revenue Surge
Guzman y Gomez has reported a robust first half of FY26, delivering strong revenue and profit growth alongside significant restaurant network expansion in Australia and the US.
- Revenue up 23% to $261.2 million in 1H26
- Underlying EBITDA rises 30% driven by operating leverage
- 44.9% increase in net profit after tax to $10.6 million
- 14 new restaurant openings in Australia, continued US expansion
- Maintains FY26 outlook despite short-term delivery partnership changes
Strong Financial Momentum
Guzman y Gomez (GYG) has delivered a compelling first half for the 2026 financial year, showcasing significant growth across its key financial metrics. Revenue surged 23% to $261.2 million, while underlying EBITDA climbed nearly 30% to $41.3 million, reflecting the benefits of operating leverage as the company scales its restaurant network. Net profit after tax rose 45% to $10.6 million, underscoring improved profitability despite ongoing investments in expansion.
Network Expansion Driving Sales Growth
The company’s growth story is powered by an expanding footprint, with 14 new restaurant openings in Australia during the half and continued development in the US and Asia. The Australian segment remains a stronghold, delivering 17.4% network sales growth and comp sales growth across all dayparts, notably breakfast and late-night trading. The US segment posted an impressive 67% network sales increase, driven by new restaurants and improving comparable sales in existing locations.
Operational Excellence and Franchise Strength
GYG’s operational discipline is evident in rising labour productivity and solid guest experience metrics. The company’s franchisees are also thriving, with median franchise annualised unit volumes up nearly 10% year-on-year and restaurant margins improving to 21.4%. Franchisee return on investment remains robust at 48%, supporting the sustainability of the network’s growth. Meanwhile, GYG’s corporate restaurants have experienced some margin pressure due to ramping new sites and elevated costs in core proteins, but these are expected to improve as sales momentum builds.
Strategic Initiatives and Market Positioning
Strategically, GYG is focusing on menu innovation, daypart expansion, and digital channels to drive future sales. The introduction of new product lines like the Caesar range and targeted marketing campaigns such as the US$7 Cali Burrito have resonated well with customers. The company also announced a shift in delivery partnerships in the US, ending its relationship with DoorDash in favour of Uber Eats, which may impact short-term sales but is aimed at long-term efficiency and brand alignment.
Financial Health and Outlook
GYG’s balance sheet remains strong with no debt and a cash position predominantly held in term deposits. Capital expenditure increased slightly to $23.1 million, supporting new restaurant openings and refurbishments. The company declared a fully franked interim dividend of 7.4 cents per share, reflecting confidence in its cash flow generation. Looking ahead, GYG maintains its FY26 guidance, expecting continued sales growth, margin improvements in the US, and stable general and administrative costs.
Bottom Line?
GYG’s half-year results affirm its growth trajectory, but the evolving US delivery landscape and margin pressures warrant close investor attention.
Questions in the middle?
- How will the shift in US delivery partnerships affect GYG’s short-term sales momentum?
- What are the key risks to margin recovery in the US corporate restaurant segment?
- How sustainable is the current pace of network expansion given competitive pressures?
