Arcos Dorados: Reports Strong Q2-2023 Financial Results

Montevideo / UY. (arc) Arcos Dorados Holdings Inc., Latin America’s largest restaurant chain and the world’s largest independent McDonald’s franchisee, reported unaudited results for the three and six months ended June 30, 2023. Second quarter 2023 highlights:

• Systemwide comparable sales increased 31.5 percent, rising 1.3 times blended inflation.
• Consolidated revenues reached USD 1.04 billion, growing 17.2 percent in US dollars and 36.2 percent in constant currency, versus the prior year period.
• Consolidated Adjusted Ebitda of USD 110.1 million rose 20.5 percent in US dollars versus the prior year result, and 31.0 percent in constant currency.
• Consolidated Adjusted Ebitda margin reached 10.6 percent in the quarter, expanding by 30 basis points versus the prior year period.
• Basic net income per share was USD 0.13 in the quarter, almost double the net income per share of USD 0.07 in the prior year quarter.
• The Company opened 10 restaurants in the period, including 8 free-standing units.
• Surpassed 100 million cumulative downloads of the Company’s Mobile App.

Chief Executive’s Commentary

CEO Marcelo Rabach: «For the last several years, Arcos Dorados has made the most of its unique position in the Latin American QSR industry. We are operating the industry’s favorite Brand and leveraging structural competitive advantages to capture the McDonald’s Brand’s full growth potential.

«Our strategy, of Digital, Delivery and Drive-thru, provides the framework and tools for strong, sustainable sales growth. Restaurant level execution has also been a key success factor. By offering guests an unmatched experience through a combination of value, quality and service, we are generating consistent transaction volume growth on a comparable basis.

«This approach to building topline has led to sales growth well above inflation that, in turn, generates fixed cost leverage and improved profitability. Importantly, the strong performance has been consistent across all three divisions. The geographic diversification we envisioned when Arcos Dorados was formed sixteen years ago has been an important success factor in recent years.

«There have been a series of actions and initiatives across the organization within a long-term, strategic framework that are driving these results. From restaurant operations to digital capabilities and investment decisions, we are working hard to generate value for all stakeholders.

«We understand the importance of efficient capital allocation, which is why we have focused our investments on modernizing existing restaurants and opening primarily free-standing locations to capitalize on the flexibility and adaptability of this restaurant format. Fortunately, the investments of the last three years have delivered above average returns on openings, modernizations and digital capabilities, among others.

«These investments provide more than just financial returns. They also make us the largest generators of first-time jobs for young people in the region. In addition to restaurant training, we offer personal and professional development opportunities that will serve them for the rest of their lives. In fact, more than 110 thousand people have enrolled for free certificate courses on a broad range of topics through Hamburger University’s MCampus online education platform.»