Arcos Dorados: Reports Q1-2021 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 months ended March 31, 2021. First quarter 2021 highlights (excluding Venezuela):

• Consolidated revenues totaled USD 559.8 million, 9.1 percent lower in US dollars, but 3.8 percent higher on a constant currency basis, versus the prior year period.
• Systemwide comparable sales increased 2.1 percent versus the prior year quarter, despite ongoing operating restrictions and a difficult comparison in January and February.
• Consolidated Adjusted Ebitda margin of 4.4 percent was up 30 basis points versus the prior year quarter, excluding the non-cash bad debt reserve reversal from the prior year’s result.
• Basic net loss was USD (0.14) per share, compared to a basic net loss of USD (0.25) per share in the prior year quarter.
• Net Debt to Adjusted Ebitda ratio was 7.9x at the end of the first quarter 2021, versus 7.4x at year-end 2020.
• More than 98 percent of the Company’s restaurants were operating at least one sales segment as of the date of this release, with approximately 67 percent operating all sales segments.

«Our first quarter 2021 results demonstrate the strength of our Three D’s strategy, the competitive advantage of our free-standing restaurant portfolio and the benefits of our wide footprint in Latin America. This was the first time since the fourth quarter of 2019 that we generated a positive systemwide comparable sales result, despite facing government-imposed operating restrictions throughout the quarter and a challenging comparison with the first two months of last year. Growth in Drive-thru, Delivery and Digital sales showed no signs of slowing down and our free-standing restaurants surpassed first quarter 2019 sales levels in constant currency,» said Marcelo Rabach, Chief Executive Officer of Arcos Dorados.

«Revenue and profitability results were strong, with positive adjusted Ebitda again in all four divisions and positive operating cash flow at the consolidated level. SLAD and Caribbean, which include several markets operating in hard or relatively stable currencies, drove the consolidated Ebitda and cash flow results. Together with all the learnings we gained in 2020, this helped to offset a slower rebound in NOLAD and mitigate the impact of a temporary tightening of operating restrictions in Brazil, beginning in March. Notably, in Brazil, we gained more than four percentage points of market share, by far the largest expansion in the industry and reaching our highest level in the last five years.»

«In the early days of May, comparable sales in the Brazilian market are responding strongly to a loosening of government-imposed operating restrictions and are already back to 90 percent of 2019 levels. This is very encouraging especially since we are still subject to restrictions on restaurant capacity and operating hours that have significantly reduced or eliminated our ability to operate during many day parts, especially evenings and late night. Having said that, we remain optimistic that progress in vaccination programs and other measures to control the spread of the virus will allow most markets to enter a Full Revival phase sometime in the second half of 2021. In the meantime, we are proud to operate the best Brand in the restaurant industry and will continue to maximize the opportunity, irrespective of market conditions,» he concluded.