GYG +11.39%: GYG delivered a better-than-feared FY26 result and, importantly, a strong start to FY27. Exiting the US has also removed a major distraction, with the focus now shifting to a very attractive Australian store rollout story.
Key results:
- Revenue of A$520.4m, below A$546.2m expected.
- Net profit (NPAT) of A$53.4m, materially ahead of A$22.4m consensus, although the comparison is flattered by the US being treated as discontinued
- Adjusted EPS of 52.1c, well ahead of 21.3c expected on the same basis.
- FY27 Australian comparable sales are running at +5.3%, importantly driven predominantly by transaction volumes rather than price.
- GYG announced a A$100m share buyback, alongside a dividend payout representing ~90% of earnings.
The most encouraging part wasn’t the headline NPAT beat, which needs to be treated with some caution, but the underlying Australian momentum. GYG added another 35 restaurants during FY26, while improving scale is translating into better margins. Importantly, it continues to resist leaning heavily on price – menu prices increased only ~2% in FY26 – meaning current comparable sales growth is being driven by more customers rather than simply charging existing customers more. With 255 restaurants against a long-term ambition of 1,000, the runway remains substantial if the unit economics hold as the network expands.
MM’s view: GYG looks like a much better business without the US experiment consuming capital and management attention. The Australian proposition was always the reason to own the stock: strong franchisee economics, attractive new-store returns and a very long rollout runway. FY26 wasn’t flawless – revenue missed consensus and the enormous NPAT beat is far less impressive once the underlying accounting is factored in, but 5.3% comp growth driven by volumes, improving margins and a A$100m buyback are tangible positives. GYG has gone a long way toward rebuilding credibility and the momentum is very encouraging.
