(Reuters) - Guzman y Gomez ( GYGLF ) on Friday reported first-half underlying earnings missed market estimates and posted a sizeable drop in sales for its U.S. business, sending its shares lower.

The Mexican fast-food chain, which listed in Australia last year, reported underlying earnings before interest, taxes, depreciation and amortization of A$31.6 million ($20.21 million), missing a Visible Alpha consensus of A$32.5 million and UBS estimate of A$35.9 million.

It logged an underlying net profit after tax of A$7.3 million, lower than market consensus of A$10.8 million.

Shares in the quick-service restaurant, which offers popular menu items like the A$12 chicken meal, dropped up to 12.2% to A$39.50 in Sydney and were set for their weakest trading session since July 2024.

Results from the firm's United States operations were mostly downbeat, with underlying loss widening and network sales dropping by 12.7%.

"The performance of the U.S. restaurants reflects the opportunity to increase brand awareness and improve the guest experience with network sales for the half decreasing," the company said in a statement.

GYG raised about A$335.1 million in what was Australia's biggest initial public offering in three years.

With much of the company's valuation hinging on future growth and the U.S. market's pivotal role in that trajectory, investors are increasingly concerned that its expansion across the Pacific could falter, prompting a wave of selling pressure.

GYG also gave corporate restaurant margin and general and administrative network sales guidance for fiscal 2025, which was below what UBS had expected.

On the bright side, GYG said it was on track to beat its prospectus profit estimates this financial year.

The group's Australian restaurants posted a 9.4% same-store sales growth to A$573 million for the first half of the yeah, benefiting from strong demand for its breakfast menu and expanded trading hours at 11 stores.

($1 = 1.5637 Australian dollars)