GYG ASX: Shares in Guzman y Gomez gained 3.2 per cent after an initial fall on Tuesday, with the Mexican fast food chain adding $1.55b in value in just two months to become a $3.75b company.

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The Mexican-themed fast-food chain is outstripping rivals in delivering strong same-store sales growth and closed at a record on Tuesday.

generated strong same-store sales growth for the first seven weeks of 2024-25, lifting the stock to a record closing high as loyal customers in the 18- to 35-year-old age group keep buying burritos and tacos.

Guzman y Gomez shares slipped 5 per cent to $34 in early trading on Tuesday but recovered to finish 3.2 per cent higher at $37. It has been a sharemarket darling since theThey were offered at $22 apiece in the float and despite initial scepticism about its valuation, jumped to $30 on the first day of trading. The sharemarket value of Guzman y Gomez is now $3.75 billion, up from $2.2 billion when it listed.

The company did not pay a dividend, preferring to plough investment into expanding its network. It aims to eventually reach 1000 outlets in Australia.Barrenjoey analyst Tom Kierath said Guzman y Gomez had “begun FY25 strongly”, with Australian same-store sales growth well ahead of the prospectus forecast of 4.8 per cent.. Collins Foods, which operates 279 of the 750 KFC outlets in Australia, warned last week that rising wages and energy costs would hit profit margins.

 

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