The Guzman Y Gomez Ltd (ASX: GYG) share price is in focus after reporting its FY26 result, with 30% profit growth, a share buyback and special dividend.
Guzman Y Gomez is a Mexican restaurant business with a national network of locations in Australia and franchise operations in Singapore and Japan.
FY26 result
Here are the highlights from the 12 months to 30 June 2026, with most figures excluding the costs of exiting the US unless stated:
- Network sales increased 17.9% to $1.38 bilion
- Revenue grew 21.8% to $540.4 billion
- Underlying EBITDA (EBITDA explained) grew 28.7% to $85 million
- Underlying net profit grew 29.7% to $53.4 million
- Statutory net profit excluding US impacts up 31.6% to $40.6 million.
- Operating cashflow grew 33.4% to $76.4 million
- Reported net loss of $26.7 million
- Final dividend per share of $0.406
- Full-year dividend per share of $0.48
What happened in this result?
The company was not seeing the progress it wanted to see in the US, so it decided to end its efforts there, for a total hit to earnings of $67.3 million. Without that, reported net profit was $40.6 million (up 31.6%).
The rest of the business grew at a fairly fast pace.
Australia network sales increased 17.9% to $1.29 billion and Asia network sales increased 17.9% to $87.1 million.
Guzman Y Guzman grew its Australian network to 255 locations in FY26, adding 32 during the year. This comprised 93 corporate locations and 162 franchise locations.
The business noted that corporate sales increased 22.1% to $439.2 million, while franchise and other revenue grew 16.3% to $91.5 million.
In February 2026, GYG and Uber Eats started an exclusive delivery partnership, which strengthened the economics of delivery. The delivery channel accounted for 27% of GYG’s total sales in FY26.
In Asia, another three restaurants were opened in Singapore during FY26 to take the total to 24. It still has five locations in Japan. New restaurant openings are planned in FY27 for both markets.
Profitability
GYG reported that its network restaurant margin improved by 20 basis points (0.20%) to 20.3%, showing improving profitability at the business.
Its Australian and Asia segment delivered underlying EBITDA of $85 million (up 28.7%), with the underlying EBITDA as a percentage of network sales increasing 50 basis points (0.50%) to 6.2%.
GYG also reported that the median franchisee return on investment (ROI) was 47%, which is a good sign for the health of the network.
Dividend and share buyback
GYG decided to declare a full-year dividend of $0.48, representing a dividend payout ratio of around 90% of underlying earnings.
The final dividend of $0.406 includes a special dividend of $0.144 to retrospectively increase the payout ratio to around 90% of underlying earnings to reflect the removal of US losses.
GYG also announced that it has approved an extension of the on-market share buyback up to a further $100 million.
Outlook for the Guzman Y Gomez share price
The company said it expects to open 35 new restaurants in Australia in FY27 as it builds towards its annual goal of opening 40 restaurants per year.
It expects comparable sales growth to continue in the mid-single-digits in FY27, though the first seven weeks of FY27 have tracked above this, partly reflecting a softer period corresponding period.
GYG also forecasts that the underlying EBITDA as a percentage of network sales could grow to between 6.7% to 6.9% in FY27, up from 6.2% in FY26. A strong corporate restaurant margin improvement is also expected in FY27.
I’m not sure how the market will react to this update in the short-term, but the compounding potential of this business is appealing if it continues to deliver growing network sales and rising profit margins.
I am a happy and long-term shareholder, with this result being another step towards a pleasing future for the business.
