The Guzman Y Gomez Ltd (ASX: GYG) share price has jumped 5% after announcing a share buyback and its FY26 first quarter update.
Guzman Y Gomez is a Mexican restaurant business, typically with a drive-through option. It has over 200 locations in Australia, plus a small presence in the US, Japan and Singapore.
FY26 first quarter update
The business said it expects sales momentum to improve from the levels achieved in the first quarter of FY26, with menu innovation, sales throughout the day, operational excellence, marketing and digital initiatives.
GYG highlighted that the launch of the new Caesar menu items have performed well to date and has contributed to an improvement in comparable sales growth after the end of the first quarter.
During the quarter, it opened five new restaurants globally, including three in Australia, one in Singapore and one in the US.
Total network sales grew by 18.6% to $330.6 million, with Australian growth of 17.4% to $305.5 million, Asian (Singapore and Japan) growth of 29.2% and US growth of 65.4% to $4.3 million.
Australia, Japan and Singapore so comparable sales growth of 4%, while the US saw comparable sales growth of 6.7%.
It ended the period with 227 locations in Australia, 22 in Singapore, five in Japan and seven in the US.
GYG share buyback
The business also announced an on-market Guzman Y Gomez share buyback of up to $100 million, which is expected to start during the second quarter of FY26.
GYG said the buyback reflects the company’s “robust balance sheet and cash generation, while preserving capacity to fund the ongoing expansion of the restaurant network”.
Outlook for the Guzman Y Gomez share price
The business expects to open 32 new restaurants in Australia, with 20 of those being franchised and 23 of them being drive-throughs.
It expects to open approximately 12 restaurants in the second quarter of FY26.
I think GYG has a very promising future and it’s one of the ASX growth shares to watch if its restaurant count and same store sales continue growing.
