Guzman y Gomez shares surge after fast-food chain says it will exit U.S. market

shares Guzman and Gomez It rose as much as 20.58% on Friday after the Mexican-themed fast food chain announced it would exit the US market and refocus on Australia.

“Having spent the last 3 months in the US, I realized that this would require much more time and capital than we expected. in question Steven Marks is the founder and co-CEO of the Australian food company.

He added that the current performance of US businesses cannot justify continued investment in shareholder capital.

The company reiterated that its decision to exit the US business “does not alter the Board’s belief in the global appeal of the GYG brand or the opportunity for long-term expansion into new geographies in a disciplined and deliberate manner.”

The company, which will immediately cease operating its restaurants in Chicago, also stated that it will support its US team “with the respect and honesty they deserve” during this transition process.

“We support today’s decision to exit the U.S. market as we remain skeptical of the company’s U.S. prospects,” Citi analysts Sam Teeger and Eileen Li said in a note.

They added that the likelihood of long-term success in the US was low, citing the lack of distinction between GYG and its rival. chipotle As well as structural challenges in Chicago.

“Pleasingly, the US departure means Co-CEO Steven Marks will return to Australia to focus on local operations,” analysts said. They added that the company was still experiencing “significant growth” in Australia, where it has 237 restaurants and its long-term target is 1,000 restaurants.

Guzman and Gomez first entered It will open to the US market in 2020. In addition to Australia, the chain also operates in Singapore and Japan. The company aims to open more than 40 restaurants per year worldwide.

The shares were last traded at AU$20.56, up nearly 14%.