Overview
- Guzman y Gomez announced on Friday that it will immediately cease trading in the U.S. and close eight restaurants across the Chicago area.
- The company expects a one-off accounting and cash hit of roughly US$30 million to US$40 million from the exit and reported its U.S. arm had already dragged on results with an $8.3 million hit in the half-year.
- Investors reacted positively to the decisive move, sending GYG shares up by as much as about 20% as markets priced out the long-running drag from the U.S. business.
- Management said it will concentrate capital and senior leadership on its stronger Australian business, which it says has healthier unit economics and a long runway toward a roughly 1,000-store target, while keeping franchised growth in Singapore and Japan.
- Executives and analysts pointed to a crowded U.S. Mexican fast-food market and the need for far greater investment to gain scale as the main reasons for the pullback, and GYG said it will support affected U.S. staff during the wind-down.