GYG has just announced its first earnings update since its IPO, reporting a pro forma net profit of $5.7 million, which is up a sizzling 94% from last year.
👉 Background: Guzman y Gomez, or GYG is the Mexican fast food chain that started in Sydney in 2006. In June, GYG listed on the ASX and its shares jumped up 36% on day one, which took its market cap to over $3 billion.
👉 What happened: GYG has just announced its first earnings update since its IPO, reporting a pro forma net profit of $5.7 million, which is up a sizzling 94% from last year. On top of that, it's 71% above the amount forecasted in their prospectus.
👉 What else: Most of the strong results came from GYG’s Aussie operations, and interestingly enough, a lot of it was thanks to growing breakfast sales. GYG must be majorly relieved as there’s always a lot riding on the first earnings update after IPO.
💡As they say, you never get a second chance to make a first impression.
💡When a company goes public, its first earnings update gives investors a sneak peak into whether investor and company expectation can meet reality. If a company bombs against its forecasts, investors are less likely to trust that company with their money in the future.
💡This is what happened with Youfoodz, the meal delivery service that IPO’ed in 2020. In 2021 it announced that it would miss revenue and EBITDA targets, disappointing shareholders. So only a few months later, it accepted a proposal from HelloFresh to merge.
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