(Bloomberg) -- Australian burrito chain Guzman y Gomez Ltd. said it’s closing its Chicago restaurants and exiting the US after failing to generate adequate sales. The company’s shares soared.

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The “US business is unlikely to deliver the performance that would justify continued investment of shareholder capital,” Founder and Co-Chief Executive Officer Steven Marks said in a statement Friday.

The stock surged as much as 21% in early Sydney trading as investors welcomed the decision to quit the unprofitable US market.

“We view the exit as a positive,” RBC Capital Markets analyst Michael Toner said in a note. “We believe the US business had very low prospects of being successful and the losses were weighing down the earnings of the group, so the sooner exit than anticipated is positive.”

The company had remained upbeat about the US as recently as early April, when it said new outlets had delivered revenue growth, and operations were improving. Marks himself had spent the past three months in the US trying to bed down the business.

“We are supportive of today’s decision to exit the US market given we had been skeptical about the company’s US prospects,” Citi analysts said in a note. “Pleasingly, the US exit means Marks will likely return to Australia to focus on local operations.”

The sudden decision to quit the vast market shows the board had finally had enough. Shareholders, too, were running out of patience. Guzman y Gomez is the most shorted stock on Australia’s benchmark S&P/ASX 200 Index. Investors holding one quarter of the stock are betting it will fall.

At Guzman y Gomez’s annual general meeting in November last year, Marks said the US restaurants were showing encouraging signs. “It’s a long game, but it’s one worth playing,” he said at the time. “We’ve proven that GYG can scale profitably in Australia, and we know we can do this in the US too.”

The company still has a long-term target of running 1,000 restaurants in Australia, about four times its current total.

It will take a charge of $30 million to $40 million for quitting the US.

Underlying earnings from the company’s Australian business will be approximately A$85 million ($61 million) for the year ending June, a jump of 29% from the prior year, the company said Friday.

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The US exit re-focuses the investment case of Guzman y Gomez on Australia, analysts at Morgan Stanley including Melinda Baxter said in a note Friday. Without the widening losses in the US, Guzman y Gomez’s earnings next year will probably by about 10% higher than previously expected, Baxter wrote.

With US losses no longer dragging on the business, Guzman y Gomez profits will improve, lifting shareholder dividends, executives said on a call after the announcement. Two analysts congratulated Marks for taking the decision to pull out of the US.

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