Sydney, May 22, 2026, 21:01 AEST
- Guzman y Gomez is shutting down its Chicago stores and exiting the U.S. right away after missing its own performance targets.
- The company is looking at a one-time profit-and-loss charge of US$30 million to US$40 million in FY26, and says cash costs are limited to around US$15 million.
- The stock climbed up to 20% on Friday, after investors backed the move away from the lossmaking growth push.
Guzman y Gomez said it will close its U.S. business and halt trading at its Chicago outlets immediately, dropping an overseas push after weak sales didn’t support further investment. The Australian burrito chain is returning its focus to Australia, where management said returns are better and growth is still possible.
GYG’s decision comes after its U.S. push started weighing on the story that investors bought into at the 2024 float. Reuters said the stock had dropped over 30% from the IPO before bouncing back on Friday, with more analysts calling the U.S. unit a short-term earnings headwind, not a growth driver.
Founder and co-CEO Steven Marks said the U.S. business made gains in brand and customer experience, but those changes haven’t led to stronger “sales momentum.” Marks, who spent three months in the U.S., said the market needs “significantly more time and capital” than they thought. ASX Announcements
GYG called the U.S. unit’s financials “not acceptable” and said it wasn’t meeting targets. The group expects to take a US$30 million to US$40 million charge in 2026 full-year numbers from the exit, pending audit. Cash exit costs for leases, employees, contracts and similar items should stay under US$15 million, the company said. ASX Announcements
The company said the one-off costs are not expected to hit its final FY26 dividend. Its buyback program is still on. It raised its Australia segment underlying EBITDA guidance to about A$85 million, a 29% jump over last year.
RBC Capital Markets analyst Michael Toner said dropping the U.S. business is a positive move. He said the unit had “very low prospects” and its losses hurt group earnings. A day earlier, Toner wrote that pulling out of the U.S. could boost GYG’s gross profit by 15%, according to Reuters. Reuters
GYG is pulling back fast. Reuters said GYG told investors in February it would stay the course in the U.S., where Chipotle has some 4,000 outlets. The plan was for a slow launch from Chicago, with an eye on eventually reaching McDonald’s store count in Australia.
Guzman y Gomez moved into the U.S. in 2020, opening eight Chicago locations, Inside Retail said. The Guardian reported the chain went after U.S. diners with large burritos but struggled in a market full of Mexican and Latin American brands.
GYG said its property pipeline is still expanding, and it’s sticking to plans to launch 32 restaurants this financial year. Marks said Australia has a “long runway” to reach its goal of 1,000 outlets. ASX Announcements
GYG says it’s sticking with overseas growth plans outside the US. Singapore and Japan, led by master franchise partners, kept up fast sales growth and strong unit economics, the company said. Singapore added its 24th store this week. Marks said the move was only about the US and doesn’t reflect on GYG’s “global potential.” ASX Announcements
Shifting focus could squeeze the company’s growth plan and make Australia even more important. But there’s still work to do: site selection, new stores and holding onto margins with rivals in the mix. The U.S. charge hasn’t been confirmed yet, and more details are set for the full-year report.
