Arcos Dorados Holdings Inc. surged 7% on Thursday after reporting second-quarter earnings that exceeded expectations and set a new revenue record for the company.
The Latin American operator of McDonald’s restaurants posted adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $118 million, up 22% year-over-year and surpassing the $105 million consensus estimate from Refinitiv. Quarterly revenue reached $1.22 billion, marking the highest figure in the company’s history and a 15% increase from the same period last year.
Same-store sales growth accelerated to 5.3%, driven by stronger performance in Brazil and Mexico, the company’s two largest markets. Arcos Dorados attributed the gains to menu price increases, expanded delivery networks and sustained demand for its core offerings. Operating margins expanded to 8.1%, up from 6.8% in Q2 2023, reflecting improved cost management amid persistent inflation pressures.
Chief Executive Woods Staton highlighted the company’s resilience in navigating economic volatility across the region. “Our teams executed well in a challenging macro environment, balancing pricing power with customer affordability,” Staton said in a statement. The company maintained its full-year revenue guidance of $4.5 billion to $4.7 billion, though it narrowed its adjusted EBITDA outlook to $400 million-$430 million from a prior range of $380 million-$440 million.
Analysts at BTG Pactual noted that the results underscore Arcos Dorados’ pricing power and operational efficiency, particularly in Brazil, where same-store sales rose 7.1%. The bank maintained a buy rating on the stock, citing its market leadership and recovery trajectory in high-growth markets.
Shares of Arcos Dorados, which trades under the ticker ARCO on the New York Stock Exchange, closed at $6.85, up 7% for the session. The stock has gained 18% year-to-date, outperforming the broader Latin American restaurant sector.
