Arcos Dorados Q2 Revenue Jumps 14%, EPS Doubles to $0.22
ARCO sits 27% above its 52-week low of $6.54.
Summary
Arcos Dorados delivered a strong Q2, with revenue up 14% to $1.30 billion, slightly ahead of the $1.29 billion consensus. Adjusted EBITDA rose 15% to $126.8 million, and basic EPS doubled to $0.22, beating the $0.15 estimate. Systemwide comparable sales climbed 15.3%, driven by guest traffic growth across all divisions and higher average check in Brazil and SLAD. Digital sales grew about 25% and now account for 66% of systemwide sales, supported by kiosks, delivery, and loyalty. This follows a record Q1 that saw a 159% surge in net income and 16% comparable sales growth, confirming sustained momentum. The company did not provide specific guidance, but the FIFA World Cup sponsorship and digital expansion are clear growth drivers. With the stock trading at 10 times forward earnings versus 12 three months ago, the valuation remains attractive relative to the $11.50 median price target.
Updates
· Benzinga — Adjusted free cash flow surged to $143.4 million from $16.1 million a year ago, and net leverage improved to 1.1x. Brazil revenue rose 25.3% and adjusted EBITDA 43.2%.
· SEC 6-K — Adjusted Free Cash Flow over the last twelve months reached $143.4 million, compared with $16.1 million in the prior-year period. The company completed redemption of all remaining 2029 Sustainability-Linked Senior Notes on July 16, 2026.
At the time of this announcement, ARCO was trading at $8.32 on NYSE in the Trade & Services sector, with a market capitalization of approximately $1.6B. The 52-week trading range was $6.54 to $9.75. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: Reuters.