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

Arcos Dorados (NYSE:ARCO) issued its earnings results on Wednesday. The restaurant operator reported $0.17 earnings per share for the quarter, topping analysts’ consensus estimates of $0.11 by $0.06, FiscalAI reports. The business had revenue of $1.22 billion for the quarter, compared to the consensus estimate of $1.21 billion. Arcos Dorados had a net margin of 4.53% and a return on equity of 8.12%. The firm’s revenue for the quarter was up 12.9% on a year-over-year basis. During the same period in the previous year, the company 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 12.1%

ARCO stock opened at $9.05 on Thursday. The company has a debt-to-equity ratio of 1.46, a current ratio of 1.03 and a quick ratio of 0.95. The company has a fifty day moving average price of $8.48 and a two-hundred day moving average price of $8.00. Arcos Dorados has a one year low of $6.51 and a one year high of $9.75. The stock has a market cap of $1.91 billion, a price-to-earnings ratio of 8.96, a price-to-earnings-growth ratio of 2.92 and a beta of 0.47.

Arcos Dorados Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 29th. Shareholders 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 yield of 3.1%. The ex-dividend date of this dividend is Wednesday, December 23rd. Arcos Dorados’s payout ratio is 23.76%.

Key Headlines Impacting Arcos Dorados

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

• Positive Sentiment: Arcos Dorados beat Q1 EPS estimates, reporting $0.17 per share versus the $0.11 consensus, a sharp improvement from $0.07 a year ago. Arcos Dorados Reports First Quarter 2026 Financial Results
• Positive Sentiment: Revenue came in at $1.22 billion, slightly above expectations, and was up 12.9% year over year, signaling continued sales momentum. Arcos Dorados (ARCO) Tops Q1 Earnings and Revenue Estimates
• Positive Sentiment: Coverage highlighted that the company is benefiting from consumer demand for convenience and value, which supports traffic and may help sustain results. McDonald’s franchisee Arcos Dorados is cashing in on convenience, value
• Neutral Sentiment: Investors also reviewed the earnings call transcript and presentation for management commentary on margins, demand trends, and the outlook. Arcos Dorados Holdings Inc. (ARCO) Q1 2026 Earnings Call Transcript
• Negative Sentiment: Some reports noted a revenue miss versus expectations in certain summaries, which may have limited the upside despite the earnings beat. Arcos Dorados Shares Rise After Earnings Beat Despite Revenue Miss (ARCO)

Wall Street Analyst Weigh In

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

Hedge Funds Weigh In On Arcos Dorados

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. XTX Topco Ltd bought a new position in Arcos Dorados during the fourth quarter worth $1,302,000. Engineers Gate Manager LP boosted its position in Arcos Dorados by 481.7% during the fourth quarter. Engineers Gate Manager LP now owns 116,214 shares of the restaurant operator’s stock worth $853,000 after purchasing an additional 96,237 shares during the period. Balyasny Asset Management L.P. bought a new position in Arcos Dorados during the fourth quarter worth $1,065,000. Boothbay Fund Management LLC boosted its position in shares of Arcos Dorados by 11.8% in the fourth quarter. Boothbay Fund Management LLC now owns 27,408 shares of the restaurant operator’s stock valued at $201,000 after acquiring an additional 2,891 shares during the period. Finally, Lazard Asset Management LLC boosted its position in shares of Arcos Dorados by 6.7% in the fourth quarter. Lazard Asset Management LLC now owns 21,471,672 shares of the restaurant operator’s stock valued at $157,602,000 after acquiring an additional 1,343,195 shares during the period. 55.91% of the stock is owned by institutional investors.

About Arcos Dorados

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.