Guzman Y Gomez (ASX:GYG) has issued a quarterly sales update – something it doesn’t need to do – spelling out an optimistic picture and reaffirming FY26 guidance while the share price touched record lows of $15.20 last Thursday.
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That was the last day anything on the ASX traded, and it inks a -50% drop in the GYG share price over the last twelve months (-49.33% if you’re pedantic.)
While the Australian company still has a $1.5 billion market cap (it makes nowhere near that in revenues, let alone profits), brokers are slowly souring on the company, which was, fun fact, started by ex-investment bankers.
GYG’s Tuesday announcement also comes as the price dips below a series of put options put on the stock as far back as June CY24, visible on the ASX website.
Notably, the company highlighted on Tuesday it has recently had a “successful launch of a new strategic partnership with Uber Eats” that “enhanced the delivery experience for GYG’s guests,” by which it presumably means Uber drivers.
(Though the term ‘guests’ is later used in the company’s Tuesday announcement to mean customers, so maybe anybody who interacts with GYG is a guest.)
That the Aussie fast food company has to highlight it has inked a fresh deal with delivery service Uber Eats – far from being a groundbreaking disruptor at this point and more of an unavoidable toxic giant – perhaps outlines how out of touch the top dogs just might be appearing in the minds of investors.
If that sounds harsh, look at the 12-month chart. The company still plans to open 23 new drive-thru stores, but Tuesday’s announcement feels a lot like it comes from pressure, and not genuine goodwill to keep the market informed.
Of course, GYG’s overall value prop has always been questionable. Its lofty forward projections depend on it beating out Taco Bell in the United States, which is obviously, well, ambitious.
And as for its U.S. operations, the company highlighted increased US sales “driven primarily by two new restaurant[s].”
How many to challenge Taco Bell, again?
In August last year, GYG’s two CEOs – it has two – wrote a letter to shareholders as the share price fell -20%. Now we have an unsolicited trading update.
There’s a reason this is one of the most heavily shorted stocks in Australia, and in a global environment as we have right now, Aussie investors have a stronger bullshit radar than usual. Not to imply criminal intent, but clearly, GYG isn’t enticing anybody through the door when it comes to equity markets.
This finance journalist has come around to the Cali burrito, however.
GYG last traded at $15.21/sh.
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