MEX: CEO Succession and Franchise Focus

(LON:MEX) Tortilla Mexican Grill FY23 Results

Tortilla Mexican Grill

Weighting as of writing: 1%

24th April 2024 - FY23 Results

Last week, Tortilla Mexican Grill announced its full-year 2023 results. It’s been a tumultuous 12 months for the nation's largest Mexican quick-serve chain, which new CEO Andy Naylor described as a “recovery” year. The company’s strategic long-term goals have been updated. Tortilla will now be focussed on UK profitability, brand growth, reinvestment in tech & people, and has declared intent to “double down” on franchising and kick-start international expansion.

Overall, it was a mixed report. While the added emphasis on profitability and expectation of margin expansion in 2024 will please some investors, a conservative revision to store expansion will not. Previously guided for 8 to 12 stores in the current fiscal year, the estimate has been revised down to just 8. Only 3 of those are expected to be company-operated; implying the slowest company-operated store growth since 2018. Tortilla has averaged ~6 ne…