Latest news with #ArcosDoradosHoldingsInc
Yahoo
15-05-2025
- Business
- Yahoo
Arcos Dorados Holdings Inc (ARCO) Q1 2025 Earnings Call Highlights: Navigating Challenges with ...
Release Date: May 14, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Arcos Dorados Holdings Inc (NYSE:ARCO) reported total revenue of $1.1 billion, maintaining levels from the previous year despite challenging conditions. Digital sales accounted for almost 60% of system-wide sales in the first quarter, with notable strength in loyalty programs and mobile order and pay. The company saw a strong rebound in Argentina, contributing to a 38.7% rise in comparable sales in the SLAT division. Arcos Dorados Holdings Inc (NYSE:ARCO) has a robust marketing plan for the remainder of the year, which is expected to improve sales performance. The company has a strong balance sheet with an investment-grade rating from Fitch and no material debt maturities until 2029. First quarter consolidated adjusted EBITDA was $91.3 million, down from the previous year due to weaker local currencies and margin pressure in Brazil. Brazil's margin contraction was mainly due to higher food and paper costs from rising beef prices. The QSR industry in Brazil and NOLAD experienced reduced traffic, attributed to lower consumer purchasing power. The company faced significant headwinds from calendar effects, including Leap Day and Holy Week, impacting sales comparisons. There was a decline in first-quarter EBITDA margin due to higher food, paper, occupancy, and other expenses as a percentage of revenue. Warning! GuruFocus has detected 3 Warning Sign with ARCO. Q: Could you comment on sales trends in the early 2nd quarter of 2025, especially in Brazil and NOLAD, under a more normalized quarter in terms of calendar effects? How much of the weak comparable sales in the first quarter is attributable to negative calendar effects versus a weaker consumption environment? A: (Marcelo Raba, CEO) In NOLAD, particularly Mexico, Panama, and Costa Rica, we faced reduced traffic in the QSR industry due to calendar effects like Holy Week. However, April showed strong performance, especially in Mexico, which is a significant market for us. We see a positive outlook for NOLAD in the coming quarters. (Luisagannao, COO) In Brazil, the calendar impact was significant, but the QSR visits were down due to lower consumer purchasing power. We remained cautious with pricing, but delivery performed strongly. We expect improved performance as the year progresses. Q: How does the company see competition passing higher beef prices into prices, and when should we start seeing a recovery in margins in Brazil? A: (Mariana Tannenbaum, CFO) During the first quarter, we faced increased beef prices in Brazil, impacting margins. We expect to stabilize gross margins through pricing strategies, supplier negotiations, and revenue management initiatives. We anticipate margins for 2025 to be similar to 2024, excluding last year's payroll expense reversals and credits in Brazil. Q: What is the company's perception of recent consumption trends in Argentina, and how can we think about the region's outlook for 2025? A: (Luisagannao, COO) Argentina showed a strong rebound due to a more stable economic environment. We expect sustained growth in volumes, sales, and margins throughout the year. The market team is doing an excellent job, and we anticipate continued positive performance in Argentina and the SLAT region. Q: Can you expand on why you only expected a 10 basis points decline in the royalty expense on a consolidated basis? A: (Marcelo Raba, CEO) The new MFA with McDonald's set a 6% contract royalty rate, eliminating the growth support concept. Brazil now pays 6% of sales, while NOLAD and SLAT pay 6% instead of 7%. This results in a 10 basis points reduction in royalties, providing a small positive impact on EBITDA margins. Q: Can you talk about consumption in Brazil and whether there are signs of improvement? A: (Marcelo Raba, CEO) The leap day had a 110 basis points impact on comparable sales, and Holy Week affected Mexico significantly. While trends are improving, the consumption environment remains volatile. We focus on maintaining customer traffic and offering competitive promotions to build a sustainable business. Despite challenges, we are gaining market share and are well-positioned for future growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
15-05-2025
- Business
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Arcos Dorados Q1 Earnings Miss Estimates, Revenues Surpass
Arcos Dorados Holdings Inc.'s ARCO first-quarter 2025 earnings missed the Zacks Consensus Estimate but revenues beat the same. On a year-over-year basis, the bottom line grew while the top line the quarter, management highlighted the impact of adverse foreign currency translation effects and macroeconomic pressures in several key markets. While revenues in constant currency grew year over year, U.S. dollar-denominated figures were dragged down by weaker local currencies, especially in Brazil and Argentina. Additionally, cautious consumer spending across Latin America limited traffic growth at its the results, the company's shares lost 5.6% during trading hours yesterday. The company reported adjusted earnings per share (EPS) of 7 cents, which lagged the Zacks Consensus Estimate of 13 cents by 46.2%. In the year-ago quarter, it reported an adjusted EPS of 14 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Arcos Dorados Holdings Inc. price-consensus-eps-surprise-chart | Arcos Dorados Holdings Inc. Quote The quarterly revenues of $1.08 billion topped the consensus mark of $1.07 billion by 0.9% but declined 0.4% year over year. The performance was tempered by calendar effects such as Leap Day and Holy Week, and significantly impacted by currency depreciation in several key markets. On a constant currency basis, the quarterly revenues grew 14.1% from last year's the first quarter, the company's systemwide comparable sales grew 11.1% year over year compared with 21.5% growth reported in the prior-year quarter. The quarter's digital sales increased 6.3% year over year. During the first quarter, food and paper costs came in at $366.6 million compared with $360.9 million reported in the prior-year quarter. General and administrative expenses were up 6.8% year over year to $73.3 operating income was $45.1 million compared with $67.6 million reported in the prior-year EBITDA during the quarter came in at $91.3 million compared with $108.9 million reported in the prior-year quarter. The adjusted EBITDA margin contracted 160 basis points (bps) year over year to 8.5%. As of March 31, 2025, Arcos Dorados had total cash and cash equivalents of $404.6 million, up from $135.1 million at financial debt as of March 31, 2025, was $1.16 billion, up from $707.6 million as of 2024-end. In the first quarter of 2025, Arcos Dorados expanded its footprint by adding 12 new Experience of the Future (EOTF) restaurants, including 10 free-standing units. By the end of March 2025, it operated a total of 1,669 EOTF restaurants, representing 68% of its overall restaurant portfolio. The company aims to ramp up its development pace throughout the year to meet its full-year target of opening 90 to 100 new locations. Arcos Dorados currently has a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here. Domino's Pizza, Inc. DPZ reported first-quarter fiscal 2025 results with earnings beating the Zacks Consensus Estimate, while revenues missed the same. The company reported adjusted EPS of $4.33, up from $3.58 reported in the year-ago quarter. Revenues of $1.11 billion increased 2.5% on a year-over-year reported benefits from the Hungry for MORE strategy during the quarter, registering growth in market share across the U.S. and international segments. DPZ continued to manage controllable factors well despite a tough global environment. The strategy supported an increase in sales, store openings and profits. These factors are important for long-term value creation for franchisees and International, Inc. EAT reported third-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The company reported adjusted EPS of $2.66, up from $1.24 reported in the year-ago quarter. Revenues of $1.43 billion increased 27.2% on a year-over-year quarterly performance benefited from strong fundamentals, leading to better guest experience and steady business growth. The ongoing increase in traffic continues to drive the company's Brands, Inc. YUM reported first-quarter 2025 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The company reported adjusted EPS of $1.30, up from $1.15 reported in the year-ago quarter. Revenues of $1.79 billion increased 12% on a year-over-year company's performance reflects solid contributions from the KFC and Taco Bell divisions. On the digital front, it reported meaningful progress, with digital sales nearing $9 billion and accounting for 55% of total sales. Franchisee feedback on Yum!'s proprietary digital platform, Byte by Yum!, remained positive, reinforcing the brand's strategic push toward tech-driven growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report Domino's Pizza Inc (DPZ) : Free Stock Analysis Report Brinker International, Inc. (EAT) : Free Stock Analysis Report Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
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Company News for May 15, 2025
Shares of Arcos Dorados Holdings Inc. (ARCO) tumbled 5.6% after the company reported first-quarter 2025 earnings of $0.07 per share, missing the Zacks Consensus Estimate of $0.13 per share. Dynatrace, Inc.'s (DT) shares jumped 5.9% after the company reported fourth-quarter fiscal 2025 earnings of $0.33 per share, beating the Zacks Consensus Estimate of $0.30 per share. Shares of Exelixis, Inc. (EXEL) surged 20.1% after the company reported first-quarter 2025 earnings of $0.62 per share, surpassing the Zacks Consensus Estimate of $0.42 per share. Alcon Inc.'s (ALC) shares plummeted 6.1% after the company reported first-quarter 2025 earnings of $0.73 per share, missing the Zacks Consensus Estimate of $0.76 per share. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alcon (ALC) : Free Stock Analysis Report Exelixis, Inc. (EXEL) : Free Stock Analysis Report Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report Dynatrace, Inc. (DT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Business Wire
14-05-2025
- Business
- Business Wire
Arcos Dorados Reports First Quarter 2025 Financial Results
MONTEVIDEO, Uruguay--(BUSINESS WIRE)--Arcos Dorados Holdings Inc. (NYSE: ARCO) ('Arcos Dorados' or the 'Company'), Latin America and the Caribbean's largest restaurant chain and the world's largest independent McDonald's franchisee, today reported unaudited results for the three months ended March 31, 2025. First Quarter 2025 Highlights Consolidated revenues totaled $1.1 billion, relatively flat versus the prior year in US dollars, despite strong currency depreciations in the Company's three largest markets. Systemwide comparable sales 1 grew 11.1%, in-line with the Company's blended inflation. The Loyalty Program reached 18.8 million registered members at the end of the quarter, supporting increased frequency and higher average check in available markets. Consolidated Adjusted EBITDA was $91.3 million, with an 8.5% margin on total revenues. Net Income was $13.9 million, with a 1.3% margin on total revenues. The Company opened 12 Experience of the Future (EOTF) restaurants in the quarter, including 10 free-standing locations. 1 For definitions, please refer to page 15 of this document. Expand Message from Marcelo Rabach, Chief Executive Officer The beginning of 2025 was in-line with our expectations when we said the first quarter should be the low point of the year. Importantly, operating performance improved sequentially in the first quarter, with the best results coming in March, and we continue to expect better performance as the year progresses. Our optimism is rooted in the belief that Arcos Dorados is uniquely positioned within Latin America's quick service restaurant (QSR) industry given the strength of our brand, the success of our strategy, the geographic diversification of our operating footprint and the numerous competitive advantages of our business model. These strengths should help Arcos Dorados navigate today's volatile and challenging market conditions better than any other restaurant operator in the region. For the first quarter, total revenue reached $1.1 billion, which was flat versus last year in US dollars. By focusing on the factors we control, we generated 11.1% systemwide comparable sales growth and drove total revenue 14.1% higher in constant currency. As a result, local currency growth was sufficient to offset (i) the strong depreciation of our three main currencies over the last twelve months, (ii) the comparison with Leap Day in last year's results and (iii) the comparison with Holy Week, which was in the first quarter of last year. Consolidated Adjusted EBITDA was $91.3 million in the quarter. Argentina and Chile rebounded strongly versus the prior year, driving SLAD's profitability higher in US dollars. Consolidated profitability declined versus last year due mainly to weaker local currencies and margin pressures in Brazil. Digital sales rose 6.3%, boosted by almost 19 million monthly average Mobile App users. Digital sales penetration was almost 60% of systemwide sales in the first quarter, with notable strength in Loyalty, Mobile Order and Pay, Own Delivery and Self-order Kiosks. The Loyalty Program continued to drive higher frequency and average check among its 18.8 million registered members and across the five markets where it was available during the quarter. Our strategy is about providing guests with an omnichannel experience, allowing them to choose when, where and how they enjoy their favorite McDonald's menu items. As a result, even as consumers pulled back on eating out of home during the quarter, off-premise channels remained resilient, generating about 43% of total systemwide sales in the quarter. No other QSR operator in the region offers guests as accessible, diverse and modernized restaurant base as Arcos Dorados. This is why our results have continued to outshine the competition, no matter the operating context, and why we remain confident in the Company's future growth and shareholder value generation. Consolidated Results Arcos Dorados' total revenues reached $1.1 billion, nearly flat in US dollars versus the prior year quarter. Total revenues grew 14.1% in constant currency, supported by 11.1% higher systemwide comparable sales. Slower underlying growth was explained by the comparison with both Leap Day and Holy Week while the US dollar result was further impacted by the strong depreciation of several local currencies versus the prior year. The Company's strategy proved its resilience in the first quarter of 2025 with sustained US dollar growth in Digital and Delivery sales, stable Drive-thru sales and the continued modernization and expansion of its restaurant portfolio. Digital sales rose 6.3% in the period, helped by close to 19 million monthly average users of the Mobile App. Digital channels generated almost 60% of systemwide sales in the quarter, including notable sales strength in Loyalty, Self-order Kiosks, Mobile Order and Pay and Own Delivery. The Company's Loyalty Program had 18.8 million registered members at the end of the first quarter of 2025. Argentina and Colombia were added to the Program during the quarter, joining Brazil, Costa Rica and Uruguay, which were added prior to 2025. Loyalty continued to gain traction with guests, generating 19% of total sales in Brazil, Costa Rica and Uruguay, with very encouraging early results in Argentina and Colombia as well. The Loyalty Program's lifecycle management strategies continued to support increased customer lifetime value as well as a 12% increase in the Mobile App's identified sales. At the end of April 2025, Ecuador became the sixth market to offer the Loyalty Program to its guests. The Program is now active in 67% of all restaurants in the Company's footprint and remains on target to be available in all main markets by year-end 2025. Drive-thru sales accounted for about 24% of systemwide sales, which has been the level for the last several quarters. Arcos Dorados continues to enjoy a structural competitive advantage with this sales channel given its market leading freestanding restaurant portfolio. The digitalization of Arcos Dorados included the implementation of a new employee scheduling system in NOLAD and SLAD's restaurants in 2024. The system, which is being optimized in 2025, helped improve productivity during the quarter, leading to a reduction in Payroll expenses as a percentage of revenue compared with the prior year period. Adjusted EBITDA – Consolidated ($ million) First quarter consolidated Adjusted EBITDA was $91.3 million, down 16.2% in US dollars versus the prior year quarter. Weaker local currencies and margin pressure in Brazil led to the lower result. This was partially offset by stronger performance in SLAD, driven by a recovery in Argentina's sales and Adjusted EBITDA, the latter delivering higher US dollars and profitability margin. Net income attributable to the Company totaled $13.9 million in the first quarter of 2025, compared to $28.5 million in the same period of 2024. The result included a depreciation and amortization expense of $46.3 million, a net interest expense of $16.6 million, a $1.9 million loss from non-cash foreign exchange and derivative instruments as well as an income tax expense of $12.5 million. Consolidated Adjusted EBITDA margin was 8.5%, down 160 basis points year-over-year. This included higher Food and Paper (F&P) costs, higher Occupancy and other operating expenses and higher General and Administrative expenses (G&A) as a percentage of revenue. These effects were partially offset by lower Payroll expenses as a percentage of revenue. Under the terms of the new Master Franchise Agreement with McDonald's, the Company will apply a lower contract royalty rate equally to all three divisions beginning January 1, 2025. As a result, NOLAD and SLAD will have about 100 basis points lower Royalty Fee throughout 2025, whereas Brazil, which will no longer receive a growth support incentive, will have about 100 basis points higher Royalty Fee, compared with 2024. The net result on the consolidated royalty rate in the first quarter was a 10 basis point reduction versus the prior year quarter and the Company expects a similar impact throughout the year. Net income margin attributable to the Company was 1.3%, or 130 basis points lower versus the first quarter of 2024. In addition to the abovementioned impacts on the Adjusted EBITDA margin, the combined loss from non-cash foreign exchange and derivative instruments as well as income tax expenses were lower, as a percentage of revenue versus the prior year quarter. Arcos Dorados recorded earnings of $0.07 per share in the first quarter of 2025 compared to $0.14 per share in the prior year period. Total weighted average shares amounted to 210,663,057 in the first quarter compared to 210,655,747 in the prior year's quarter. Notable items in the Adjusted EBITDA reconciliation Included in Adjusted EBITDA: there were no notable items included in the Adjusted EBITDA in either the first quarter of 2025 or the first quarter of 2024. Excluded from Adjusted EBITDA: there were no notable items excluded from the Adjusted EBITDA in either the first quarter of 2025 or the first quarter of 2024. Divisional Results Brazil Division – Key Financial Results Brazil's revenues totaled $400.3 million, down in US dollars due to the depreciation of the Brazilian real. According to third-party research, consumer visits to the informal eating out industry in Brazil declined versus the same period last year. Despite this softness in industry traffic, the Company's systemwide comparable sales rose 2.9% year-over-year. Digital sales growth in the division benefitted from marketing campaigns such as the Big Brother Brasil and Lollapalooza music festival sponsorships that successfully increased engagement with and awareness of the 'Meu Méqui' Loyalty Program. Notable menu innovation in the quarter included the launch of McChicken Lemon Pepper and Double McChicken, reinforcing the chicken category. The Company also brought back the popular McFish sandwich for a limited time, now paired with Rustic Potatoes, offering its version of 'Fish & Chips' to delight its guests. In March, Brazil introduced the 'Méqui do Dia' campaign, offering a different combo promotion each day of the work week. Finally, new dessert offerings included guest-favorite M&M and Kit Kat with coconut versions of the McFlurry. According to third-party research (CREST), McDonald's brand preference increased during the quarter and value share reached a new record for the trailing-twelve-month period through March, accounting for almost 47% of the country's QSR industry sales. As reported Adjusted EBITDA in the division totaled $49.6 million in the quarter. The strong depreciation of the Brazilian real and a lower profitability margin led to the decline versus the prior year. Higher beef and other input costs pressured the F&P line in the quarter while slower sales growth led to deleveraging in the Occupancy and other operating expenses line. Payroll expenses improved while G&A remained relatively flat as a percentage of revenue. As mentioned previously, Royalty Fees were about 100 basis points higher as a percentage of revenue versus the first quarter of 2024. North Latin American Division (NOLAD) – Key Financial Results As reported revenues in NOLAD totaled $281.7 million, with the year-over-year decline explained mainly by the depreciation of the Mexican peso and challenging economic conditions in many of the division's markets. Systemwide comparable sales declined 1.6% year-over-year. Notably, the result included low single digit growth in Mexico, despite the difficult comparison with Leap Day and Holy Week in the prior year and a challenging consumer environment this year. This was offset by lower comparable sales in Costa Rica and Panama, versus the same period last year. Guests in NOLAD adopted Mobile Order & Pay in increasing numbers in the quarter and Own Delivery achieved remarkable growth. Digital campaigns such as AppNiversary were key to drive downloads and customer engagement. NOLAD's marketing activities aimed at staying close to the consumer in a challenging operating environment by focusing on value platforms. Mexico leveraged its 'Elige tu Fav' and '3x3' value platforms, Costa Rica added the 'Combo de los Cinco' to its existing 'McMenú' platform and Puerto Rico launched a bold breakfast campaign, 'Las Mañanas son de McDonald's' to showcase the iconic breakfast menu. NOLAD generated food news through core extensions such as 'McCrispy Legend' in Puerto Rico, the Big Mac Bacon and Double Big Mac in Costa Rica and the Filet-O-Fish in Panama. Several markets also introduced new flavors to local dessert menus. As reported Adjusted EBITDA in the division was $26.2 million in the quarter. The lower result versus the prior year came from the weaker currencies and lower total revenue. The flattish margin mainly included better F&P and Royalty Fees, which was compensated by higher Occupancy & Other Operating expenses and G&A as a percentage of revenue. Payroll expenses were approximately flat as a percentage of revenue versus the previous year, despite the continuation of minimum wage increases above inflation in Mexico and Puerto Rico. South Latin American Division (SLAD) – Key Financial Results SLAD's as reported revenues in the quarter were $394.6 million, up 19.7% in US dollars. Argentina rebounded from last year's challenging beginning to the year, adding to strong systemwide comparable sales growth contributions from markets such as Ecuador, Uruguay and Venezuela. Digital sales in SLAD grew about 33% in US dollars versus the prior year period. Argentina and Uruguay, both of which reached 70% digital sales penetration, generated among the Company's fastest rates of growth in Digital sales. Identified sales grew 50% versus the same period last year, and now represents more than 26% of SLAD's sales. The Loyalty Program celebrated the one-year anniversary of its launch in Uruguay, where results are among the best globally in terms of engagement. More recently, SLAD added Argentina and Colombia to the Program and early results have been promising. The AppNiversary campaign and Lollapalooza sponsorship contributed to Loyalty Program adoption as well as to growth of Own Delivery and Mobile Order & Pay on the Company's Mobile App. Most of the division's markets celebrated core favorites, with a Big Mac extension campaign to boost brand favoritism among guests. Additionally, premium line campaigns in several markets featured innovative and unique menu items such as "Tasty Feat Cuarto" in Argentina, "Tasty Turbo Bacon" in Colombia and "Master Provolone" in Ecuador. Desserts included innovations such as the Choco Cono, Oreo Cone and favorite local flavors in the McFlurry, which increased the already-large perception gap versus the nearest competitor in this segment. Visit share and brand equity scores sustained the positive trends of the last few quarters, with especially impressive results in markets such as Argentina and Uruguay. As reported Adjusted EBITDA totaled $39.1 million in the first quarter. The strong growth in the US dollar result was generated by a recovery in the division's profitability margin and a significantly lower currency impact compared with the prior year quarter. Margin expansion included the lower Royalty rate and better performance in nearly all cost and expense line items, with notably better Payroll productivity. All the division's main markets delivered higher profitability versus the prior year quarter. New Unit Development: Total and by Format 1 Figure 6. Footprint as of March 31, 2025 as of Mar. 31, 2025 Store Format* Total Restaurants Ownership McCafes Dessert Centers FS IS MS & FC Company Operated Franchised Brazil 630 90 459 1,179 725 454 146 2,020 NOLAD 414 47 196 657 499 158 19 523 SLAD 262 124 217 603 506 97 222 738 TOTAL 1,306 261 872 2,439 1,730 709 387 3,281 * FS: Freestanding; IS: In-Store; MS: Mall Store; FC: Food Court. Expand Arcos Dorados added 12 new EOTF restaurants to the Company's footprint, including 10 free-standing units, in the first quarter of 2025. The Company plans to accelerate the pace of openings as the year progresses to meet its full-year guidance of 90 to 100 new restaurants. As of the end of March 2025, there were 1,669 EOTF restaurants in Arcos Dorados footprint, making up 68% of its restaurant portfolio. Consolidated Debt and Financial Ratios Figure 7. Consolidated Debt and Financial Ratios (In thousands of U.S. dollars, except ratios) March 31, December 31, 2025 2024 Total Cash & cash equivalents (i) 494,791 138,593 Total Financial Debt (ii) 1,163,404 707,649 Net Financial Debt (iii) 668,613 569,056 LTM Adjusted EBITDA 482,444 500,100 Total Financial Debt / LTM Adjusted EBITDA ratio 2.4 1.4 Net Financial Debt / LTM Adjusted EBITDA ratio 1.4 1.1 LTM Net income attributable to AD 134,180 148,759 Total Financial Debt / LTM Net income attributable to AD ratio 8.7 4.8 Net Financial Debt / LTM Net income attributable to AD ratio 5.0 3.8 (i) Total cash & cash equivalents includes short-term investment (ii)Total financial debt includes short-term debt, long-term debt, accrued interest payable and derivative instruments (including the asset portion of derivatives amounting to $75.3 million and $80.3 million as a reduction of financial debt as of March 31, 2025 and December 31, 2024, respectively). (iii) Net financial debt equals total financial debt less total cash & cash equivalents. Expand As of March 31, 2025, total cash and cash equivalents were $494.8 million, including the net proceeds of the 2032 Notes issuance during the first quarter. Total financial debt (including the net derivative instrument position) was $1.2 billion. This figure included $243.1 million of the 2027 Notes, which the Company redeemed with cash on hand in April 2025. Net debt (total financial debt minus total cash and cash equivalents) at the end of March 2025 was $668.6 million, up from $569.1 million at the end of 2024. The net debt to Adjusted EBITDA leverage ratio ended the first quarter at 1.4x, up from 1.1x at the end of 2024. Net cash used in operating activities in the first quarter of 2025, totaled $13.4 million with total property and equipment expenditures of $ 48.8 million. This compares with the prior year quarter's net cash used in operating activities of $9.4 million and total property and equipment expenditures of $61.2 million. Recent Developments 2027 Notes Redemption On February 28, 2025, the Company announced the redemption of the untendered portion of the 2027 Notes, at a price equal to 100% of the outstanding principal amount of the Notes plus accrued and unpaid interest from October 4, 2024, to April 4, 2025, the redemption date. The redemption of the 2027 Notes was completed on April 4, 2025. 2025 Annual General Shareholders' Meeting The Company held its Annual General Shareholders' Meeting in Willemstad, Curaçao on April 25, 2025. At the meeting, all the proposals were approved by the required majority of shareholders. First Quarter 2025 Earnings Webcast A webcast to discuss the information contained in this press release will be held today, May 14, 2025, at 10:00 a.m. ET. In order to access the webcast, members of the investment community should follow this link: Arcos Dorados First Quarter 2025 Earnings Webcast. A replay of the webcast will be available later today in the investor section of the Company's website: Definitions In analyzing business trends, management considers a variety of performance and financial measures which are considered to be non-GAAP including: Adjusted EBITDA, Constant Currency basis, Systemwide sales, and Systemwide comparable sales growth. Adjusted EBITDA: In addition to financial measures prepared in accordance with the general accepted accounting principles (GAAP), this press release and the accompanying tables use a non-GAAP financial measure titled 'Adjusted EBITDA'. Management uses Adjusted EBITDA to facilitate operating performance comparisons from period to period. Adjusted EBITDA is defined as the Company's operating income plus depreciation and amortization plus/minus the following losses/gains: gains from sale or insurance recovery of property and equipment, write-offs of long-lived assets, and impairment of long-lived assets. Management believes Adjusted EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations such as capital structures (affecting net interest expense and other financing results), taxation (affecting income tax expense) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. Figure 8 of this earnings release includes a reconciliation for Adjusted EBITDA. For more information, please see Adjusted EBITDA reconciliation in Note 9 – Segment and geographic information – of our financial statements (6-K Form) filed today with the S.E.C. Constant Currency basis: refers to amounts calculated using the same exchange rate over the periods under comparison to remove the effects of currency fluctuations from this trend analysis. To better discern underlying business trends, this release uses non-GAAP financial measures that segregate year-over-year growth into two categories: (i) currency translation and (ii) constant currency growth. (i) Currency translation reflects the impact on growth of the appreciation or depreciation of the local currencies in which the Company conducts its business against the US dollar (the currency in which the Company's financial statements are prepared). (ii) Constant currency growth reflects the underlying growth of the business excluding the effect from currency translation. The Company also calculates variations as a percentage in constant currency, which are also considered to be non-GAAP measures, to provide a more meaningful analysis of its business by identifying the underlying business trends, without distortion from the effect of foreign currency fluctuations. Systemwide sales: Systemwide sales represent measures for both Company-operated and sub-franchised restaurants. While sales by sub-franchisees are not recorded as revenues by the Company, management believes the information is important in understanding its financial performance because these sales are the basis on which it calculates and records sub-franchised restaurant revenues and are indicative of the financial health of its sub-franchisee base. Systemwide comparable sales growth: this non-GAAP measure, refers to the change, on a constant currency basis, in Company-operated and sub-franchised restaurant sales in one period from a comparable period for restaurants that have been open for thirteen months or longer (year-over-year basis) including those temporarily closed. Management believes it is a key performance indicator used within the retail industry and is indicative of the success of the Company's initiatives as well as local economic, competitive and consumer trends. Sales by sub-franchisees are not recorded as revenues by the Company. About Arcos Dorados Arcos Dorados is the world's largest independent McDonald's franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald's restaurants in 20 Latin American and Caribbean countries and territories with more than 2,400 restaurants, operated by the Company or by its sub-franchisees, that together employ more than 100 thousand people (as of 03/31/2025). The Company is also committed to the development of the communities in which it operates, to providing young people their first formal job opportunities and to utilize its Recipe for the Future to achieve a positive environmental impact. Arcos Dorados is listed for trading on the New York Stock Exchange (NYSE: ARCO). To learn more about the Company, please visit the Investors section of our website: Cautionary Statement on Forward-Looking Statements This press release contains forward-looking statements. The forward-looking statements contained herein include statements about the Company's business prospects, its ability to attract customers, its expectation for revenue generation and its outlook and guidance for 2025. These statements are subject to the general risks inherent in Arcos Dorados' business. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados' business and operations involve numerous risks and uncertainties, many of which are beyond the control of Arcos Dorados, which could result in Arcos Dorados' expectations not being realized or otherwise materially affect the financial condition, results of operations and cash flows of Arcos Dorados. Additional information relating to the uncertainties affecting Arcos Dorados' business is contained in its filings with the Securities and Exchange Commission. The forward-looking statements are made only as of the date hereof, and Arcos Dorados does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. First Quarter 2025 Consolidated Results First Quarter 2025 Results by Division and Average Exchange Rates per Quarter Figure 9. First Quarter 2025 Consolidated Results by Division (In thousands of U.S. dollars) For Three-Months ended as Constant March 31, reported Currency 2025 2024 Incr/(Decr)% Incr/(Decr)% Revenues Brazil 400,302 448,937 -10.8% 5.5% NOLAD 281,700 302,721 -6.9% -0.4% SLAD 394,590 329,698 19.7% 39.1% TOTAL 1,076,592 1,081,356 -0.4% 14.1% Operating Income (loss) Brazil 32,978 57,042 -42.2% -31.5% NOLAD 12,859 17,983 -28.5% -27.2% SLAD 25,069 14,442 73.6% 97.5% Corporate and Other (25,759) (21,916) -17.5% -30.9% TOTAL 45,147 67,551 -33.2% -23.0% Adjusted EBITDA Brazil 49,569 75,446 -34.3% -22.2% NOLAD 26,240 28,602 -8.3% -3.6% SLAD 39,060 24,741 57.9% 79.7% Corporate and Other (23,590) (19,854) -18.8% -32.8% TOTAL 91,279 108,935 -16.2% -4.2% Expand Figure 10. Average Exchange Rate per Quarter period average local currency per US$ Brazil Mexico Argentina 1Q25 5.86 20.43 1,055.04 1Q24 4.95 16.97 834.32 Expand Summarized Consolidated Balance Sheet Figure 11. Summarized Consolidated Balance Sheets (In thousands of U.S. dollars) March 31, December 31, 2025 2024 ASSETS Current assets Cash and cash equivalents 404,606 135,064 Short-term investments 90,185 3,529 Accounts and notes receivable, net 148,628 119,441 Other current assets (1) 217,258 209,953 Derivative instruments 132 416 Total current assets 860,809 468,403 Non-current assets Property and equipment, net 1,175,979 1,127,042 Net intangible assets and goodwill 133,823 66,644 Deferred income taxes 106,010 90,287 Derivative instruments 75,169 79,874 Equity method investments 14,362 14,346 Leases right of use asset 997,942 949,977 Other non-current assets (2) 102,926 96,081 Total non-current assets 2,606,211 2,424,251 Total assets 3,467,020 2,892,654 LIABILITIES AND EQUITY Current liabilities Accounts payable 297,609 347,895 Taxes payable (3) 116,447 118,466 Accrued payroll and other liabilities 155,076 113,259 Royalties payable to McDonald's Corporation 27,813 20,860 Provision for contingencies 1,198 1,199 Interest payable 21,873 7,798 Financial debt (4) 285,738 64,167 Operating lease liabilities 95,278 92,280 Total current liabilities 1,001,032 765,924 Non-current liabilities Accrued payroll and other liabilities 90,763 20,928 Provision for contingencies 33,015 29,157 Financial debt (5) 931,094 715,974 Deferred income taxes 2,094 2,084 Operating lease liabilities 892,259 849,158 Total non-current liabilities 1,949,225 1,617,301 Total liabilities 2,950,257 2,383,225 Equity Class A shares of common stock 389,967 389,967 Class B shares of common stock 132,915 132,915 Additional paid-in capital 8,659 8,659 Retained earnings 627,760 664,390 Accumulated other comprehensive loss (624,687) (668,484) Common stock in treasury (19,367) (19,367) Total Arcos Dorados Holdings Inc shareholders' equity 515,247 508,080 Non-controlling interest in subsidiaries 1,516 1,349 Total equity 516,763 509,429 Total liabilities and equity 3,467,020 2,892,654 (1) Includes "Other receivables", "Inventories" and "Prepaid expenses and other current assets". (2) Includes "Miscellaneous" and "Collateral deposits". (3) Includes "Income taxes payable" and "Other taxes payable". (4) Includes "Short-term debt', 'Current portion of long-term debt" and "Derivative instruments'. (5) Includes "Long-term debt, excluding current portion" and "Derivative instruments". Expand
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ARCO Gears Up for Q1 Earnings: What's in the Offing for the Stock?
Arcos Dorados Holdings Inc. ARCO is scheduled to report first-quarter 2025 results on May 14, 2025. In the preceding quarter, the company's earnings surpassed the Zacks Consensus Estimate by 27.3%. The Zacks Consensus Estimate for earnings is pegged at 13 cents per share, down 7.1% year over year. In the past 30 days, earnings estimates for the current quarter have remained stable. The consensus mark for revenues is pegged at $1.07 billion, down 1.3% year over year. Arcos Dorados' first-quarter 2025 results are likely to be hurt by macroeconomic headwinds and shifts in consumer sentiment. It anticipates comparable sales growth in the first quarter to have been soft, owing to transitory challenges that have been broadly affecting consumer-facing businesses in Latin of the factors contributing to this expected softness is the comparison against a leap year, which has created a tougher year-over-year benchmark. Additionally, weaker currency levels in many of the company's core markets are expected to have weighed on the quarter's the other hand, high costs are likely to have hurt the bottom line. ARCO continues to invest in its digital and IT infrastructure, including restaurant-level digital tools, which is likely to have increased operational expenses. These investments aim to improve long-term efficiency and customer experience but might have increased short-term costs. Arcos Dorados Holdings Inc. price-eps-surprise | Arcos Dorados Holdings Inc. Quote Our proven model does not conclusively predict an earnings beat for Arcos Dorados this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case Earnings ESP: Arcos Dorados has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Rank of ARCO: Arcos Dorados currently carries a Zacks Rank #3 (Hold). Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:Monster Beverage MNST currently has an Earnings ESP of +0.54% and a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks company is expected to register growth in both top and bottom lines when it reports first-quarter 2025 results. The Zacks Consensus Estimate for MNST's quarterly earnings has been stable in the past 30 days at 46 cents per share, indicating 9.5% growth from the year-ago quarter's number. The consensus estimate for Monster Beverage's quarterly revenues is pegged at almost $2 billion, implying a rise of 3.7% from the figure reported in the prior-year quarter. MNST reported a negative earnings surprise of 5.8%, on average, in the trailing four quarters. Dollar General Corporation DG currently has an Earnings ESP of +4.30% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter fiscal 2025 earnings per share is pegged at $1.46, implying an 11.5% year-over-year General's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $10.26 billion, which indicates an increase of 3.5% from the figure reported in the prior-year quarter. DG delivered a trailing four-quarter earnings surprise of 1.2%, on General Stores, Inc. CASY currently has an Earnings ESP of +5.05% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 earnings per share is pegged at $1.93, calling for a 17.5% year-over-year top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.97 billion, which indicates an increase of 10.3% from the figure reported in the prior-year quarter. CASY delivered a trailing four-quarter earnings surprise of 22.7%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dollar General Corporation (DG) : Free Stock Analysis Report Monster Beverage Corporation (MNST) : Free Stock Analysis Report Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
