Guzman and Gomez Shares Crashed 20% On Friday, the Mexican Fast-Food Chain reported Full-Year Earnings that spooled investors depite posting record profits and strong top-line Growth. The Stock Opened at $ 27.04 Before Plunging As Low As $ 22.74, Settling Around $ 23.40 by Mid-Morning Trading.
The Dramatic Seloff Came Evite Impressive Full-Year Results for Fy2025, With Network Sales Surging 23% to $ 1.18 Billion and Ebitda Rocketing 245.5% to $ 65.1 million. Net Profit After Tax Jumped 151.8% to $ 14.5 million, Enabling The Company to Declare ITS Maiden Dividend of 12.6 Cents Per Share Fully Franked.
Growth Momentum Stalls
Investors Focused on Concerning Comparable Sales Trends That Suggest The Company’s Rapid Expansion May Be losing Steam. While Fy2025 Delivered 9.8% Comparable Sales Growth Across Australia, The First Seven Weeks of Fy2026 Showed A Sharp December to Just 3.7% Annualized Growth.
This Dramatic Slown Triggerred Alarm Bells Among Investors Who Had Valued The Stock Based on its Ability to Sustain Double-Digit Comparable Sales Growth. The Company’s Share Price Has Been Under Pressure Throunge 2025, Already Down 42.5% Year-To-Date Before Friday’s Additionional Decline.
Management Remains Confident
CEO Steven Marks Attempted to Reassure Investors, Noting That periods of slower comparable Sales are not unusual for the business. “Over The Past 7 Years We’ve Had Less Than 5% Weekly Comps 16% of the Time,” I explained, attributing the current weakness to timing of marketing campaigns and menu launches.
Management Highlightd An Upcoming Major Campaign With “Incredible Menu Addition” Expecta To Boost Performance In Q2, Expressing Confidence that comparable SALES SALES Will Improve From Current Levels.
LEAVE MANAGEMENT’S OPTIMISM, INVESTORS REMAIN UNCONVINCED ABOUT THE COMPANY’S NEAR-TERM PROSPECTS. The Stock Has Now Declined 31.65% Over The Past 12 Months and Nearly Halved from ITS All-Time Highs, Reflecting Growing Concerns About the Sustainability of its Growth Trageectory.
The Earnings Disappointment Follows A Pattern of Missed Expectations, with the Company Previous Preast Reporting First-Half Underlying Earnings that Fell Short of Analyst Forecasts Earlier This Year. Market sentiment Appears to have turned decisively negative on the stock, with investors looking Beyond Strong Historical Results to Focus on Forward-Looking Growth Metrics.
The Sharp Decline Underscores The Challenges Facing High-Growth Retail Stocks in The Current Market Environment, where invests are increasingly demanding consisting consumption rather than skin on growth promises Alone.
