Arcos Dorados Holdings Inc. (NYSE:ARCO), the largest McDonald’s franchisee in Latin America, reported second-quarter earnings that exceeded analyst projections, though revenue slightly missed expectations. Shares fell 1.44% in pre-market trading following the announcement.
The company posted adjusted earnings of $0.11 per share, well above the $0.07 consensus, while total revenue came in at $1.14 billion, slightly below the anticipated $1.15 billion, marking a 2.8% increase from last year.
Systemwide comparable sales rose 12.1% year-over-year, with the North and South Latin America divisions outperforming blended inflation rates by 1.8x and 1.4x, respectively. Digital sales continued to grow, rising 7.9% and representing over 60% of systemwide sales.
“The results we are reporting today demonstrate the strength of the Arcos Dorados business model,” said Luis Raganato, Chief Executive Officer. “Each of our markets faced a unique set of operating conditions and each delivered strong results within the context of their environments.”
Adjusted EBITDA declined 7.3% to $110.1 million, mainly due to higher beef costs in Brazil and the absence of a prior-year one-time labor contingency benefit.
The company’s Loyalty Program reached 21.5 million members across six markets, contributing 22.6% of sales in those regions. Arcos Dorados also expanded by opening 20 new Experience of the Future restaurants and acquiring three locations in Saint Martin, marking its 21st territory. The company reported a net debt to adjusted EBITDA ratio of 1.4x, supporting its recent ’BBB-’ investment-grade rating from S&P Global.
Arcos Dorados Holdings stock price
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