Guzman Y Gomez (GYG) has credited its growth strategy with powering record-breaking first-half earnings.
Revenue for the six-month period climbed to $681.8 million, an 18 per cent increase on the prior comparable period. With a net profit after tax (NPAT) of $10.6 million, a 44.9 per cent increase, GYG’s leadership spoke of the reasons behind its success.
“GYG opened 17 restaurants globally this half, and we are not slowing down,” said Steven Marks, founder and co-CEO.
“We added 33 restaurants to the Australian pipeline, bringing the total to 108, reflecting the confidence we have in our growth strategy and the incredible real estate opportunity ahead. At the end of the half, we had 272 GYG restaurants operating globally.”
Marks said that GYG’s median franchise restaurant grew its sales by 9.8 per cent to $6 million, with restaurant operating margins at 21.4 per cent. Going forward, he added that the focus will shift to drive-through restaurants.
“On average, drive-thru restaurants achieved $6.9 million in sales and 22 per cent restaurant margins in the half,” he said.
“With (around) 85 per cent of new restaurant openings to be drive-thrus going forward, we are confident we are investing in the right strategy for growth.”
GYG’s leadership issued a letter alongside its strong earnings report, stating that the company is well-positioned to continue its network expansion.
The letter, penned by the company’s co-CEOs, reads: “The reason we are obsessed with the health of our network is because it gives us the right to grow. In recent years, we have accelerated our restaurant openings, and the results have not disappointed.”
In GYG’s US division, network sales grew by 67 per cent across the half-year period. With a small footprint in the country, GYG said a 69.8 per cent decline in corporate restaurant margins was due to ongoing costs associated with growing the business.
“We want to stress that this is a start-up business,” the CEOs added. “Our comp sales base consists of just four restaurants today, and as a result, this metric will fluctuate over short periods of time.
