Ex-trader’s burrito fortune plunges on Guzman y Gomez sales slowdown

SYDNEY – The honeymoon is officially over for burrito baron Steven Marks: Just a year after Guzman y Gomez’s blockbuster market debut made him a multi-millionaire, the founder’s fortune is getting hammered. 

Shares of his Mexican-themed fast-food chain cratered on Aug 22 after the company reported a sales slowdown at its Australian restaurants. The record 18 per cent plunge took his stake’s value to around A$235 million (S$195.7 million), down more than 40 per cent from the peak in February.

The firm’s shares closed 7.8 per cent higher at A$25.54 on Aug 25.

Mr Marks, a native of Long Island in the US, saw his fortune soar after Guzman y Gomez listed on the Australian Securities Exchange in June 2024, becoming the nation’s best debut in years. But after more than doubling, the shares took a hit when the company reported in February that its restaurant margin had narrowed. Its latest release last week showed sales in Australia climbed less than what analysts had anticipated. 

“It hasn’t always been easy, but we have been relentless in the journey to achieve our vision to reinvent fast food and change the way the masses eat,” Mr Marks said in an earnings call on Aug 22. He added that the company expects to open 32 new restaurants in Australia in the 2026 fiscal year and that earnings will increase. “We’re very confident about what we built.”

The decline in investor confidence is partly due to concerns over the firm’s aggressive expansion plans. Also known as GYG, the company said when it listed that it aimed to grow to 1,000 locations in Australia – about the same as McDonald’s – up from around 200 now. 

Mr Marks’ journey is not a conventional one, and his early life was a far cry from corporate luxury. His father was a “pool hustler from Miami Beach” with addiction issues, who left his mother to raise him, his twin brother and his disabled older brother, Mr Marks said in a Bloomberg interview in 2024. By eight, he was doing odd jobs to help support his family.

A gift for numbers became his ticket out, winning him a place at the prestigious University of Pennsylvania. After graduating in 1994, he landed a job on the equities desk of Mr Steven Cohen’s hard-driving hedge fund SAC Capital Advisors in Stamford, Connecticut. After four years, he moved to Cheyne Capital in London. 

While the experience taught him how to have “laser focus”, he grew tired of betting on other people’s businesses and decided to have his own, he said during the Bloomberg interview. The resolution ultimately led him to swop securities trading for burrito recipes. 

The stock downturn is a major test of public market confidence since Mr Marks launched the business in 2006 out of sheer frustration with what he called Australia’s “dismal” Mexican food. Now, he must rely on the same grit from his early days – and the guidance of his leadership team, which includes chairman Guy Russo, the former CEO of McDonald’s Australia – to convince investors that his company’s growth story is far from over.

“We’re kind of best-in-class, but there’s always opportunities,” GYG co-CEO Hilton Brett said on the earnings call. “We know we can get better.” BLOOMBERG