Background: Guzman y Gomez is the Aussie fast-food chain founded in Sydney back in 2006. Since then, it’s grown into Australia’s very own Mexican food empire. The company went public in 2024, and its shares soared 36% on listing day. At one point, GyG was valued at nearly $4 billion.

What happened: After a rough patch where Guzman y Gomez missed earnings expectations and its share price dropped from $45 to $24, the burrito giant seems to be finding its footing again. The company just reported an 18.6% bump in quarterly sales.

What else: Riding on that recovery, GyG has announced a $100 million share buyback over the next 12 months. GyG is signalling confidence in its future.

What's the key learning?

💡A share buyback is when a company buys back its own shares from the stock market. With fewer shares in circulation, each remaining share typically increases in value. It's a way to reward shareholders without paying a dividend.

💡Buybacks also signal confidence by telling investors the company believes its shares are undervalued and that its future prospects are strong. It's essentially saying, “We’re worth more than the market thinks.”

💡More Aussie companies are jumping on the buyback trend. Telstra recently announced a $1 billion program, CSL unveiled a $750 million one, and analysts say companies that launch buybacks often outperform the market by around 10% in the year that follows. So GyG will sit back and hope its shares return to its previous-highs.