Arcos Dorados (NYSE:ARCO) Issues Earnings Results, Beats Expectations By $0.06 EPS

Arcos Dorados (NYSE:ARCO) announced its quarterly earnings data on Wednesday. The restaurant operator reported $0.17 EPS for the quarter, beating analysts’ consensus estimates of $0.11 by $0.06, FiscalAI reports. The firm had revenue of $1.22 billion during the quarter, compared to the consensus estimate of $1.21 billion. Arcos Dorados had a net margin of 4.86% and a return on equity of 10.76%. The firm’s revenue was up 12.9% compared to the same quarter last year. During the same quarter last year, the firm earned $0.07 earnings per share.

Here are the key takeaways from Arcos Dorados’ conference call:

• Q1 revenue and profitability hit records for a first quarter, with revenue up about 13% to over $1.2 billion and adjusted EBITDA rising to about $119 million, helped by stronger comp sales and margin expansion.
• Brazil showed a clear turnaround in traffic trends late in the quarter and into Q2, with management saying April and early May are starting strong after a post-Carnaval slowdown, while maintaining healthier margins.
• Beef and broader food costs improved, especially in Brazil, where lower beef costs were a key driver of margin expansion; management said it is cautiously optimistic on food and paper costs for the rest of 2026.
• Digital and loyalty remained major growth engines, with digital channels contributing about 64% of system-wide sales and the loyalty program surpassing 30 million members across 10 countries, supporting frequency and customer retention.
• Capital discipline and balance-sheet management remained a priority, as adjusted free cash flow improved to nearly $110 million over the last 12 months and the company said it will keep focusing on higher-return openings, efficiency, and a stable mix of corporate versus sub-franchise restaurants.

Arcos Dorados Trading Up 0.7%

Shares of Arcos Dorados stock opened at $9.15 on Friday. The company has a debt-to-equity ratio of 1.46, a current ratio of 1.03 and a quick ratio of 0.95. Arcos Dorados has a 1 year low of $6.51 and a 1 year high of $9.75. The company has a market capitalization of $1.93 billion, a P/E ratio of 8.24, a P/E/G ratio of 3.14 and a beta of 0.47. The business has a 50 day moving average price of $8.50 and a 200 day moving average price of $8.02.

Arcos Dorados Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Tuesday, December 29th. Stockholders of record on Wednesday, December 23rd will be given a dividend of $0.07 per share. This represents a $0.28 dividend on an annualized basis and a dividend yield of 3.1%. The ex-dividend date is Wednesday, December 23rd. Arcos Dorados’s dividend payout ratio (DPR) is presently 21.62%.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of ARCO. Royal Bank of Canada raised its position in shares of Arcos Dorados by 23.1% during the 1st quarter. Royal Bank of Canada now owns 538,925 shares of the restaurant operator’s stock worth $4,344,000 after purchasing an additional 101,301 shares during the last quarter. Jane Street Group LLC raised its position in shares of Arcos Dorados by 58.3% during the 1st quarter. Jane Street Group LLC now owns 309,785 shares of the restaurant operator’s stock worth $2,497,000 after purchasing an additional 114,034 shares during the last quarter. Jump Financial LLC acquired a new position in shares of Arcos Dorados during the 2nd quarter worth approximately $1,315,000. WINTON GROUP Ltd raised its position in shares of Arcos Dorados by 213.3% during the 2nd quarter. WINTON GROUP Ltd now owns 50,077 shares of the restaurant operator’s stock worth $395,000 after purchasing an additional 34,094 shares during the last quarter. Finally, Nebula Research & Development LLC raised its position in shares of Arcos Dorados by 6.3% during the 2nd quarter. Nebula Research & Development LLC now owns 166,767 shares of the restaurant operator’s stock worth $1,316,000 after purchasing an additional 9,892 shares during the last quarter. 55.91% of the stock is currently owned by institutional investors and hedge funds.

Analysts Set New Price Targets

A number of equities research analysts have recently issued reports on ARCO shares. Wall Street Zen downgraded shares of Arcos Dorados from a “buy” rating to a “hold” rating in a research report on Saturday, April 25th. The Goldman Sachs Group reiterated a “buy” rating on shares of Arcos Dorados in a research report on Wednesday, April 8th. Santander upgraded shares of Arcos Dorados to an “outperform” rating in a research report on Monday, April 20th. Finally, Weiss Ratings reiterated a “hold (c)” rating on shares of Arcos Dorados in a research report on Monday, April 27th. Two equities research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of “Hold” and an average target price of $8.70.

Key Arcos Dorados News

Here are the key news stories impacting Arcos Dorados this week:

• Positive Sentiment: Arcos Dorados beat quarterly profit expectations by a wide margin, which is the main catalyst behind the stock’s strength. Arcos Dorados Holdings Inc. (NYSE:ARCO) Q1 2026 Earnings Call Transcript
• Positive Sentiment: Quarterly revenue edged above estimates and rose sharply from a year ago, suggesting healthy traffic and resilient consumer demand in its Latin American markets. Arcos Dorados Reports First Quarter 2026 Financial Results
• Positive Sentiment: Media coverage highlighted that the company is benefiting from its focus on convenience and value, reinforcing the view that the brand is gaining share with price-sensitive customers. McDonald’s Franchisee Arcos Dorados Is Cashing In On Convenience, Value
• Neutral Sentiment: Several transcript and summary articles about the earnings call may help investors gauge management commentary, but they do not add much new beyond the initial earnings beat. Arcos Dorados Holdings Inc. (ARCO) Q1 2026 Earnings Call Transcript

Arcos Dorados Company Profile

Arcos Dorados Holdings Inc is the largest independent McDonald’s franchisee in the world, operating under an exclusive license agreement with McDonald’s Corporation. The company develops, owns and operates quick-service restaurants, offering the full McDonald’s menu, including hamburgers, chicken sandwiches, salads, sides, desserts and McCafé beverages. In addition to restaurant operations, Arcos Dorados manages supply chain logistics, property development, training and support services for its franchise network.

Headquartered in Montevideo, Uruguay, Arcos Dorados serves 20 markets across Latin America and the Caribbean, including Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico and Uruguay.