Interview: GyG was 2024's biggest IPO, but investors are hammering it
Feb 24, 2025
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Steven Marks, Co-CEO of Guzman y Gomez, a fast-food chain known for its commitment to quality, shares insights on the company's journey post-IPO, the largest in 2024. Despite recent investor concerns, he expresses unwavering optimism about growth in both Australia and the U.S. Steven discusses their aggressive strategy to open over a thousand locations, focusing on prime positions and excellent service. He also addresses challenges in the saturated market, emphasizing brand experience and resilience in a fluctuating economy.
Guzman y Gomez shows a mixed financial performance, with strong Australian results contrasted by significant U.S. market losses, necessitating a strategic pivot.
The company's commitment to quality food and transparency, alongside affordable menu options and convenience-driven drive-thrus, aims to attract younger consumers.
Deep dives
Challenges and Optimism in the U.S. Market
The financial performance of Guzman y Gomez (GYG) reveals a mixed outlook, with strong results in Australia overshadowed by significant losses in the U.S. market. Despite a decline exceeding 60% in U.S. sales, the company is optimistic about future growth, highlighting their strategy to enhance the guest experience and strengthen the brand through concentrated restaurant locations in Chicago. The planned opening of a sixth restaurant in a college town, along with a new menu initiative, 'Clean is the New Healthy', aims to attract more customers and build brand recognition. GYG believes that brand building takes time, emphasizing their commitment to quality food and customer service in a competitive environment.
Adapting to Consumer Needs in a Competitive Market
GYG positions itself as a fast food provider that resonates with younger consumers by prioritizing high-quality food and transparency in its menu. The company has adapted its offerings to include affordable items, such as $3 tacos and mini bowls, to align with changing consumer habits influenced by economic pressures. The introduction of drive-thrus has become a significant focus, with a goal of expanding this format to accommodate the need for convenience. GYG views these adaptations as essential for maintaining their market presence and appealing to a broad customer base.
Expansion Goals Amidst Economic Fluctuations
GYG aims to grow its footprint significantly, targeting 1,000 restaurants in Australia with an annual increase of up to 40 new locations over the next five years. The company boasts a robust pipeline for new real estate, focusing on prime drive-thru locations to capture consumer demand effectively. Despite the challenges posed by a fluctuating Australian dollar and other economic factors, GYG remains confident in its business model, asserting that the demand for quality fast food will persist irrespective of external pressures. GYG's focus on employee engagement and talent development also contributes to its growth strategy, ensuring that the brand maintains a competitive edge in the fast-food industry.
Guzman y Gomez was the biggest float of 2024, but after announcing its half-year results last week it's copped a hammering from investors. But co-CEO Steven Marks remains very enthusastic about the outlook for the business, both in Australia and in the US - and his passion for the business comes through in this interview.
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