Arcos Dorados (NYSE:ARCO) Announces Earnings Results

Arcos Dorados (NYSE:ARCO) posted its quarterly earnings data on Thursday. The restaurant operator reported $0.12 EPS for the quarter, missing the consensus estimate of $0.20 by ($0.08), FiscalAI reports. The company had revenue of $1.27 billion during the quarter, compared to the consensus estimate of $1.26 billion. Arcos Dorados had a net margin of 5.39% and a return on equity of 20.42%. The company’s revenue was up 10.7% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.28 earnings per share.

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

• Arcos Dorados reported a strong Q4 with total revenue of $1.3 billion (+10.7%) and system‑wide comparable sales up 16%, while adjusted EBITDA rose 17.2% to $172.7 million (80 bps margin expansion); full‑year adjusted EBITDA was the highest in company history, though materially aided by recognized tax benefits.
• Digital and loyalty initiatives continue to drive share and sales, with digital channels representing 62% of sales, 27.2 million loyalty members, and the company opening 102 restaurants in 2025 while modernizing the portfolio to 73%.
• Brazil showed improving sequential trends and market‑share protection via the Economia value platform (roughly 2x nearest competitor), but consumption remains weak and beef inflation pressured margins earlier in 2025 despite gross‑margin recovery beginning in Q4 and into early 2026.
• Management executed capital‑structure optimization: a BRL $150m bank loan (matures 2029, ~2.53% USD‑equivalent) funded a tender for ~$135m of 2029 notes, lowering the average cost of debt and increasing interest deductibility.
• Cost and capital discipline are priorities — a completed G&A/headcount restructuring trims ongoing costs by >$10 million annually (with an $8.7m EBITDA add‑back), 2026 guidance calls for 105–115 openings and $275–325m CapEx, and the board raised the dividend to $0.28/share.

Arcos Dorados Stock Performance

ARCO stock traded down $0.02 during mid-day trading on Thursday, reaching $7.68. The company had a trading volume of 979,688 shares, compared to its average volume of 1,440,811. Arcos Dorados has a 52 week low of $6.51 and a 52 week high of $8.98. The stock has a 50 day simple moving average of $8.17 and a two-hundred day simple moving average of $7.51. The company has a quick ratio of 0.81, a current ratio of 0.89 and a debt-to-equity ratio of 1.32.

Analyst Ratings Changes

Several equities analysts have recently weighed in on ARCO shares. Zacks Research raised shares of Arcos Dorados from a “strong sell” rating to a “hold” rating in a research note on Friday, November 21st. Weiss Ratings reissued a “hold (c-)” rating on shares of Arcos Dorados in a research report on Monday, December 29th. Three equities research analysts have rated the stock with a Hold rating, According to data from MarketBeat, Arcos Dorados presently has an average rating of “Hold” and an average price target of $8.70.

Hedge Funds Weigh In On Arcos Dorados

Several hedge funds and other institutional investors have recently made changes to their positions in the company. Global Retirement Partners LLC lifted its stake in Arcos Dorados by 9,074.6% in the fourth quarter. Global Retirement Partners LLC now owns 5,780 shares of the restaurant operator’s stock valued at $42,000 after acquiring an additional 5,717 shares during the last quarter. Quarry LP acquired a new position in shares of Arcos Dorados during the 3rd quarter worth about $45,000. Aquatic Capital Management LLC bought a new stake in shares of Arcos Dorados in the 3rd quarter valued at about $53,000. Virtu Financial LLC bought a new stake in shares of Arcos Dorados in the 3rd quarter valued at about $87,000. Finally, Sei Investments Co. acquired a new stake in Arcos Dorados in the 3rd quarter valued at about $106,000. 55.91% of the stock is owned by institutional investors.

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.