Arcos Dorados misses earnings estimates, stock falls 4%

Published 14/05/2025, 12:34
Arcos Dorados misses earnings estimates, stock falls 4%

NEW YORK - Arcos Dorados Holdings Inc . (NYSE:ARCO), the world’s largest independent McDonald’s (NYSE:MCD) franchisee, reported first quarter earnings that fell short of analyst expectations on Wednesday.

The company’s stock was down over 4.29% in pre-market trading following the release.

The Latin American fast food operator posted earnings per share of $0.07 for the quarter, missing the analyst consensus estimate of $0.15. Revenue came in at $1.1 billion, surpassing expectations of $1.05 billion.

Systemwide comparable sales grew 11.1% year-over-year, in line with the company’s blended inflation rate. However, consolidated adjusted EBITDA fell 16.2% to $91.3 million, with the margin contracting to 8.5% from 10.1% a year ago.

"The beginning of 2025 was in-line with our expectations when we said the first quarter should be the low point of the year," said CEO Marcelo Rabach. He noted that operating performance improved sequentially during the quarter, with March delivering the strongest results.

Digital sales rose 6.3% year-over-year and accounted for almost 60% of total systemwide sales. The company’s loyalty program reached 18.8 million registered members across five markets by quarter-end.

Arcos Dorados opened 12 new "Experience of the Future" restaurants in Q1, including 10 free-standing locations. It plans to accelerate openings to meet its full-year target of 90-100 new restaurants.

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