Guzman y Gomez is trading near record lows, with industry experts blaming the nosedive on the fast-food chain’s decision to expand into the saturated US market.
The company was founded in 2006 by New York entrepreneurs Steven Marks and Hilton Brett, who opened their first restaurant in Sydney’s inner-west suburb of Newtown.
Guzman y Gomez listed on the Australian share market in June last year, and the share price shot up from $22 to $43 in a few months.
Despite a strong debut, the Mexican fast-food chain was trading at around $24 on Tuesday.
Caldera House principal Gigi Penna said the company appears to be facing growing pains.
‘This was a super-hot IPO. Its listing price was $22, it surged to $45, and today it’s trading back around $25,’ she said.
‘The IPO pitch was all about raising capital to expand into global markets, particularly the US. But I believe their US expansion just isn’t going well.’
Ms Penna questioned whether the slump reflected broader market uncertainty or waning consumer interest.
Guzman y Gomez co-founder Steven Marks (pictured) was upbeat about the company’s performance amid concerns its US expansion isn’t going well
Caldera House principal Gigi Penna said the company appears to be facing growing pains
‘Is this more about a jittery market, or have people simply gone off burritos and lost faith in the brand?’
Online commentary has been harsh, with some likening Guzman y Gomez’s US ambitions to Sushi Hub trying to crack the Japanese market – a comparison that underscores scepticism about the brand’s international strategy.
‘G &G will get crushed in the US,’ one said.
‘Only reason it does well in Australia is due to the absolute lack of competition and authentic Mexican food.’
‘Why did they think the USA would like GYG?’ another said.
‘It’s absolutely awful Mexican food. The only reason it does well here is because most Aussies haven’t ever had proper Mexican.’
Others agreed the company faced steep competition in the US, where authentic Mexican food is widely available.
‘Even the corner block food trucks are unreal over there,’ one commenter said.
The company’s global network now includes 256 restaurants, with just under 100 in Australia, with moves to open more stores that operate 24/7
‘I remember stopping on the street and getting a burrito for like $4. It was the best thing I ever had.’
Another added: ‘Slight arrogance launching sub-standard Mexican in one of the best Mexican street food nations.’
Some argued the once-hot stock remains overvalued at $24.
‘The IPO had massive shortcomings, yet people still invested. It’s probably still overvalued,’ one said.
The criticism follows Guzman y Gomez’s late August 2025 announcement of record network sales exceeding $1billion and a more than doubling of full-year profit to $14.5million for FY2025.
The company attributed the result to strong performance in Australia and its expanded US presence, which now includes seven stores all of which are located in the Chicago, Illinois area.
Despite the strong profit growth, shares dropped 20 per cent after the results were released, with analysts pointing to weaker-than-expected comparable sales, softer margins, and mounting losses from its US expansion.
Its global network now includes 256 restaurants, with just under 100 in Australia.
The criticism follows Guzman y Gomez’s late August 2025 announcement of record network sales exceeding $1billion and a more than doubling of full-year profit to $14.5million for FY2025 (stock image)
In a statement, the company said it had made ‘significant progress’ in the US, citing 57 per cent total network sales growth in the final quarter.
Co-founder Steven Marks described the past financial year as ‘exceptional.’
‘Global network sales grew 23 per cent, showing just how much people love our clean, fresh, made-to-order Mexican food,’ he said.
‘We wrapped up the year with 256 restaurants around the world, opening 39 new restaurants, including 32 in Australia.
‘With 98 locations in our Australian pipeline and an incredible real estate team our expansion plans have never been stronger.’
The company also opened four restaurants in Singapore, one in Japan, and two in the US.
It said its Australian network had seen strong growth in late-night and breakfast trading, with 18 restaurants now operating 24/7.
The rollout of 24/7 restaurants is expected to continue across its local network this financial year.
