Arcos Dorados ( (ARCO) ) has released its Q1 earnings. Here is a breakdown of the information Arcos Dorados presented to its investors.
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Arcos Dorados Holdings Inc. is the largest independent McDonald’s franchisee globally, operating the largest quick service restaurant chain in Latin America and the Caribbean, with over 2,400 locations. In the first quarter of 2025, Arcos Dorados reported total revenues of $1.1 billion, maintaining a stable performance despite significant currency depreciation in its major markets. The company saw a notable increase in digital sales, which accounted for nearly 60% of total sales, and expanded its loyalty program to a sixth market, reaching 18.8 million members.
Key financial highlights for the quarter included an 11.1% growth in systemwide comparable sales and a consolidated adjusted EBITDA of $91.3 million, although net income decreased to $13.9 million from $28.5 million in the previous year. The company’s net debt to adjusted EBITDA leverage ratio stood at 1.4x, reflecting a slight increase from the end of 2024. Despite challenges, the company opened 12 new Experience of the Future restaurants, continuing its expansion strategy.
The company’s performance varied across its divisions. In Brazil, revenues declined due to currency depreciation, but digital sales initiatives like the ‘Meu Méqui’ Loyalty Program showed positive engagement. The North Latin American Division faced challenges with currency depreciation and economic conditions, but digital sales and marketing campaigns helped maintain consumer engagement. The South Latin American Division saw a strong rebound, particularly in Argentina, with significant growth in digital sales and loyalty program adoption.
Looking ahead, Arcos Dorados remains optimistic about its growth prospects, leveraging its strong brand presence and strategic initiatives to navigate the volatile market conditions in Latin America. The company plans to accelerate restaurant openings throughout the year, aiming to enhance shareholder value and sustain its competitive edge in the quick service restaurant industry.