The Guzman Y Gomez Ltd (ASX: GYG) share price is under the spotlight after releasing its FY24 first quarter update.
GYG is a Mexican fast-food business with a large and growing presence in Australia, as well as a smaller number of locations in Singapore, Japan and the US.
GYG FY24 first quarter update
The Mexican food business told investors about its performance for the three months to 30 September 2024.
The company reported total network sales of $278.8 million, up 20.7% year on year from the first quarter of FY24.
Australian network sales grew 21% to $260.2 million, Singapore sales increased 19.3% to $13.6 million, Japan sales jumped 25% to $2.5 million and the US sales declined 3.7% to $2.6 million.
Guzman Y Gomez said the Australian, Singapore and Japan comparable sales growth was 8.7%, lower than the 11.7% comparable growth that was achieved in the first quarter of FY24. GYG said its comparable sales growth was above expectations, thanks to “strong delivery performance, successful execution of the ‘clean is the new healthy’ campaign and guest demand for value menu items”.
GYG said its US segment’s performance was “in line with expectations” for the quarter, with the prior corresponding period benefiting from initial higher sales associated with new restaurant openings.
In terms of the number of restaurants it has, it reported it had 70 corporate locations and 129 franchised locations in Australia, representing a 10.5% (or 19 locations) increase year on year.
Over the 12 months to September 2024, its Singapore network grew by one to 18, the Japan network rose by one to a total of five and the US network increased by one to reach four in North America.
GYG said it expects to meet its FY25 prospectus forecasts for FY25, including the opening of 31 new restaurants in Australia. It revealed it had opened five new restaurants in the quarter.
Is the Guzman Y Gomez share price appealing?
The GYG share price is priced for a lot of success in the coming years, and any disappointments could cause a sizeable sell-off. I’m not looking to buy today.
In ten years, I think GYG will be a much bigger business, with significantly more restaurants and I’d guess it will have entered more countries.
However, without a time machine, it’s hard to know what the low point of the GYG share price will be in FY25 or beyond. For now, there are other ASX growth shares I’d rather buy.
