Guzman Y Gomez has given up on the US market, announcing it would end its operations there immediately.

“Guzman Y Gomez today announced that it has decided to exit the US market and will cease trading its restaurants in Chicago with immediate effect,” the company said in a statement to the ASX on Friday.

Investors were well pleased, as shares spiked 15 per cent in the first 30 minutes of trading.

The announcement first thanked staff for their “passion, professionalism and conviction to bring GYG to a new market”.

“The business is committed to supporting every member of the US team through this transition with the respect and integrity they deserve.”

But Guzman’s US business was struggling.

“Notwithstanding the progress made by the team on brand and guest experience, the financial performance of the US business has not been acceptable and is not meeting targeted hurdles,” the company told the ASX.

Founder and chief executive Steven Marks said the US expansion would take more money and time than first anticipated.

“I have always been confident in the differentiation of our food and guest experience, however this was not translating to an improvement in sales momentum,” he said.

“Having spent the last three months in the US, I realised this was going to take significantly more time and capital than we had expected.

“In assessing the trajectory of the current network, the board and I have concluded that the business is unlikely to deliver the performance that would justify continued investment of shareholder capital.”

ECP Asset management hold shares in GYG, and firm partner Jason Pohl said axing the US operations removed a distraction.

“The US was never the only thing the market worried about, but it was the most visible and the most polarising,” he said.

“We have maintained that while many focused on the US, that was never what we owned the company for. The Australian business has genuinely strong economics and a long growth runway in front of it. That’s where we see the value.”

The business had kept prices low relative to other fast-food chains to retain loyal customers, he said.

“Walking away from the US is the same instinct, a willingness to do the harder thing because it’s right for the business over time,” Mr Pohl said.

“We’ve backed Steven (Marks) and his team for a long time, and the way they make decisions is a big part of why.

“What’s left today is a simpler, healthier business with the US distraction gone. For long-term holders like us, the road ahead looks clearer today than it did a week ago.”

EToro analyst Josh Gilbert said Guzman Y Gomez was one of the “most shorted” stocks on the ASX, as investors lost faith in the US expansion well before Friday’s announcement.

“It’s a tough admission for management, but it’s the right call,” Mr Gilbert said.

“What the market has been crying out for is a clear pathway to profitability, and closing the US restaurants removes a persistent drag on capital and lets management focus on the business that’s actually working.”

A $US30m-$40m hit to close the American business was ugly, but better than a “slow bleed”.

“What markets don’t forgive is open-ended losses with no end in sight, and that’s what the company’s US operations had become,” Mr Gilbert said.

“Importantly for shareholders, the final dividend is unaffected and the buyback remains active.”

Paying out the US workers, leases and contracts is going to cost $US15m ($21m).

The company’s half-year financial results in February foreshadowed the US shutdown.

Australian sales had grown 17 per cent in the second half of 2025.

The seventh and eighth US stores were opened in that period, but US sales fell from $4.1m to $3.9m.

The business also ditched DoorDash to go with Uber Eats in the US, which they flagged would hurt short-term sales numbers.

But the business reported to be carrying no debt as of December 31, and shareholders received a fully franked dividend of 7.4 cents per share.

Australia Asia focus for GyG

Focusing on positive operating environments in Asia and Australia was the smart move, Mr Gilbert said.

“With a long-term target of 1000 restaurants in Australia, up from just over 200 today, the runway at home is substantial, and the brand’s fresher, health-led positioning continues to resonate with a demographic that cares about what they eat,” he said.

“GYG is trading in a US growth narrative that investors had given up on for an Australian story they actually trust.”

“Beyond Singapore and Japan, we continue to believe there will be the right opportunities, in the right markets, with the right models.

“Beyond Singapore and Japan, we continue to believe there will be the right opportunities, in the right markets, with the right models.

“When those opportunities arrive, we will be ready.”