Just over a year ago, Mexican food chain business Guzman Y Gomez Ltd (ASX: GYG) made its ASX debut in one of the hottest initial public offerings (IPOs) in years.
And what a day it was for shareholders!
Shares in this ASX 200 consumer discretionary stock closed out the day at $30 apiece, which marked a 36% surge to their IPO price of $22 a pop.
More good news was soon to come.
By early September, the company's share price surpassed $40 apiece.
And in February this year, Guzman Y Gomez notched up its all-time high closing share price of $45.32 – more than double its IPO price.
Since then, however, things have not been going as well.
Just a few days later, the company's share price tumbled by 14% to $38.58 after it reported its FY25 half-year results.
Fast forward to today and Guzman Y Gomez last traded at $27.61.
So, since listing on the ASX, the company's shares are up by 26% from their IPO price of $22.
But how does this performance compare to another beloved ASX-listed restauranteur, Domino's Pizza Enterprises Ltd (ASX: DMP)?
Before we find out, let's first meet the contenders.
Tacos with ambition
Guzman Y Gomez is a Mexican-inspired fast-casual restaurant chain originally founded in 2006.
Its menu contains a variety of Mexican dishes such as burritos, tacos, quesadillas, and nachos, as well as an array of side dishes, breakfast options, and desserts.
The company's food is marketed as a healthier and more sustainable alternative to traditional fast-food chains.
Today, the group operates 241 restaurants across Australia, Singapore, Japan, and the US.
However, it is targeting a network of more than 1,000 outlets as part of its growth strategy.
Pizza under pressure
Domino's Pizza Enterprises is the largest Domino's franchisee outside the US.
It listed on the ASX in 2005 and today operates more than 3,500 stores across 12 international markets, including Australia, New Zealand, and a host of European and Asian nations.
Its menu is dominated by a wide array of pizzas, including a value range, traditional and premium, as well as vegan and vegetarian options.
The group also serves a number of side dishes, chicken products, and desserts.
Most recently, Domino's has focused its operations on cost efficiency and profitability amid market volatility and varying regional performance.
This strategy included the closure of 205 loss-making stores, particularly in Japan.
Who comes out on top?
Domino's shares were trading at $36.48 when Guzman y Gomez listed on the ASX on 20 June last year.
As of last Friday's close, they had fallen to $18.27 apiece – representing a 50% loss for shareholders over this period.
In contrast, investors who bought into Guzman y Gomez at its IPO have seen a 26% gain.
We have a winner… sort of
It turns out that Guzman y Gomez shares have outperformed Domino's since the Mexican restaurant chain debuted on the ASX.
However, investors who bought its shares around their February peak are currently facing losses of nearly 40%.
By comparison, Domino's shareholders who entered at the same time are down about 44%.
In short, it's been a tough few months for both stocks.
That said, short-term volatility is only part of the story.
What matters more is how each business performs in the long term.
And with earnings season kicking off in August, we are about to get a clearer picture of where both companies are heading.
