Arcos Dorados: Reports First Quarter 2022 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 financial results for the three months ended March 31, 2022.

First Quarter 2022 Highlights – Excluding Venezuela

• Systemwide comparable sales² increased 42.0 percent versus the prior year quarter, with strong results in all divisions.
• Consolidated¹ revenues totaled USD 787.3 million, rising 40.6 percent in US dollars, or 45.2 percent in constant currency², versus the prior year period.
• Consolidated¹ Adjusted Ebitda of USD 79.6 million was the highest-ever for a first quarter and trailing twelve month Adjusted Ebitda was the highest in the Company’s history.
• Consolidated¹ Adjusted Ebitda margin reached 10.1 percent in the quarter, with strong sales growth driving operating leverage in all line items versus 2021.
• Basic net income per share¹ was USD 0.12, compared to basic net loss per share of USD (0.13) in the prior year quarter.
• Net Debt to Adjusted Ebitda leverage ratio was 1.3x at the end of the first quarter 2022.

Message from Marcelo Rabach, Chief Executive Officer

«We are reporting another quarter of record sales and profitability. These broad-based and sustainable results are a testament to the structural competitive advantages we have been building for years and the focused execution of our Three-D’s (Digital, Delivery and Drive-thru) strategy. Revenue reached nearly USD 790 million in the quarter, with systemwide comparable sales up 42 percent on the back of strong volume growth and continued market share gains within a consolidating marketplace. Digital sales (Delivery, Mobile App and Self-order Kiosks) contributed 38 percent of the quarter’s sales and included the highest-ever US dollar sales totals for Delivery, Self-order Kiosks and Order Ahead.

«Revenue management (including pricing, product mix and segmentation) plus a highly-localized supply chain and efficient operation drove significant operating leverage across all cost and expense line items. Adjusted Ebitda was a record for a first quarter and the trailing twelve month result is now the highest in our history.

«The Company’s balance sheet and cash generation are very strong. After the quarter ended, we became the first quick-service restaurant operator in the world to issue a Sustainability-Linked Bond (SLB). As a result, the average maturity of our long-term debt has been extended to 6.0 years, with no major maturities until September of 2027.

«We are proud of the Recipe of the Future ESG platform we developed several years ago and this SLB proves once-again that we are committed to the targets we established to have a positive influence on the communities we serve and the planet as a whole. These commitments are good for business, as demonstrated by the lowest spread over US Treasuries ever for an Arcos Dorados long-term debt instrument. But, more importantly, tying our financial strategy to our long-term climate change commitments is the right thing to do.

«We began 2022 with a strong pace of growth, opening 16 restaurants, including 14 free-standing units and 10 restaurants in Brazil. We have worked hard to increase the size and accelerate the pace of the openings pipeline. Based on the current run-rate, we expect to exceed restaurant opening and capital expenditure guidance for 2022.

«We are very encouraged by the results we are reporting today and strongly believe they will be sustainable over time. Both Arcos Dorados and the McDonald’s brand in Latin America and the Caribbean are in a very strong competitive position.»

For additional information please read the company’s PDF file below (533 KB):

20220518-ARCOS-DORADOS-Q1-2022.