Guzman y Gomez grilled as it looks to beat Maccas on breakfast
By Jessica Yun
Guzman y Gomez wants to steal the tradie and early morning crowd away from McDonald’s with its own coffee, as the burrito business rolls out more 24/7 restaurants to convince investors it can continue its breakneck pace of growth.
Founder and co-chief executive Steve Marks said new breakfast and coffee items will land on the menu later this year, with an eye to enticing Australians who drive to work early in the morning.
“They only, for a long time, had McDonald’s to stop at,” said Marks. “Now they see their GYGs. Tradies love their big brekkie burrito and our coffee.”
Guzman y Gomez’s first location in Newtown. The burrito chain is going after McDonald’s’ strong coffee sales.Credit: Dominic Lorrimer
McDonald’s sells more than 230 million coffees a year, or more than 600,000 a day, with roughly one in four coffees in Australia said to be sold through the fast food chain.
“McDonald’s has a billion dollars in sales just in coffee in Australia. We’re honestly not at that level yet, but that’s where we’re aiming to get to,” Marks said. He added that the restaurants were staffed by a trained barista and pointed to the credentials of the burrito chain’s coffee blend, which won the Golden Bean Australasia Award in large chain espresso earlier this year.
Marks, who is from New York, founded Guzman y Gomez in Sydney’s Newtown in 2006. And his comments on Friday came as the company endured its worst day of trading since its blockbuster listing on the sharemarket last year.
Guzman y Gomez’s share price nosedived 22.5 per cent despite a 23 per cent growth in network sales to nearly $1.2 billion, more than doubling net profits to $14.5 million, and declaring a maiden dividend of 12.6 cents fully franked for the 2025 financial year.
The burrito chain’s results missed RBC Capital Markets’ estimates by 7.5 per cent and analyst consensus by 3.1 per cent, with the first seven weeks of fiscal 2026 trading also coming in lower than analyst expectations. A UBS note also showed it missed expectations.
Despite the poor response from investors, Marks said he was thrilled that the Australian market had cracked the $1 billion sales milestone. “We celebrated two years ago that we hit the cumulative billion mark over 17 years. This year, we blew by it in one year,” he said.
Guzman y Gomez co-chief executives Steven Marks (left) and Hilton Brett.Credit: Louie Douvis
The global fast food industry is contending with a more challenging environment, with KFC and Pizza Hut sales in the US recording declines recently. Chipotle and Starbucks are also experiencing lower customer traffic as fast casual chains adjust to better communicate their value.
Guzman y Gomez opened 39 new restaurants in the 2025 financial year – 32 in Australia, four in Singapore, one in Japan and two in the US – bringing the total number of restaurants to 256.
The Mexican-inspired chain has earmarked drive-through restaurants as a key growth area; of 98 restaurants in the pipeline, 88 are slated to be drive-through. It intends to open 32 new restaurants in fiscal 2026.
It currently has six stores in Chicago and plans to grow this to 15, company documents state.
Marks said a handful of Australian team leaders were flown over to Chicago to better embed Guzman y Gomez’ team culture into restaurants, which has resulted in a “significant improvement” in guest experience and a “step-change” in sales momentum.
“Most people that work in traditional fast food in the US, nobody cares about it, right? It’s kind of like a dead-end job,” said Marks.
“So for us, it was a real concerted effort here in Australia throughout all of our years to take incredible care of our crew, and now we’re starting to see tenure in our restaurants.”
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