Arcos Dorados Holdings Inc. (NYSE:ARCO) — the world’s largest independent McDonald’s franchisee — reported third-quarter 2025 results that met earnings expectations while delivering solid sales growth, sending its shares up 4.0% in pre-market trading on Wednesday.
The company posted adjusted earnings of $0.71 per share, a sharp increase from $0.17 per share in the same period a year ago. Revenue rose 5.2% year-over-year to $1.2 billion, supported by systemwide comparable sales growth of 12.7%, which was broadly in line with the company’s blended inflation rate for the quarter.
Results were significantly lifted by a $125.2 million net benefit from a federal tax credit in Brazil covering the years 2016–2023. This one-time benefit contributed $85.6 million to operating income and $39.6 million to interest income. Arcos Dorados said the credit is expected to begin generating positive cash flow in 2026.
“During the third quarter of 2025, we successfully navigated challenging consumer dynamics to generate balanced US dollar revenue growth and solid profitability,” said Luis Raganato, Chief Executive Officer of Arcos Dorados.
Digital sales continued to expand, with mobile app, delivery, and self-order kiosk channels growing 11.2% year-over-year, now representing 61% of systemwide sales. The company’s loyalty program also showed strong momentum, reaching 23.6 million registered members, nearly 50% growth since the end of 2024.
Arcos Dorados opened 22 new restaurants in the quarter, including 19 free-standing locations, maintaining a net debt to adjusted EBITDA ratio of 1.2x as of September 30, 2025.
“We are pushing to have a solid finish to 2025, while positioning ourselves for a stronger performance next year, targeting sustainable topline growth and improved operational efficiency,” Raganato added.