Arcos Dorados: Reports Q2-2024 Financial Results

Montevideo / UY. (arc) Arcos Dorados Holdings Inc., Latin America’s and the Caribbean’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, 2024. Second quarter 2024 highlights:

Chief Executive’s Commentary

CEO Marcelo Rabach: «We believe our second quarter 2024 results demonstrate our ability to perform strongly in any operating context. Sales and profitability growth through June have been consistent with our strategy, especially when you consider the tougher-than-expected macroeconomic and consumer environments we are facing this year. To manage through this period, we are focused on the factors we can control to minimize short-term volatility and maximize long-term growth.

«Consolidated revenue rose 6.8 percent in the second quarter, reaching the highest level ever for a second quarter in US dollars. Guest traffic growth continued to support comparable sales growth even as consumers have become more discerning with their discretionary spending. This is where our omnichannel approach, strong value proposition and operational excellence have established McDonald’s as the region’s favorite QSR brand.

«Systemwide comparable sales growth was 2.4x the Company’s blended inflation, excluding Argentina. According to our proprietary research, we expanded market share by nearly three percentage points across the region, outpacing our nearest competitors by a wide margin. The Three D’s Strategy of Digital, Delivery and Drive-thru has set a new standard of quality, service and value for the quick service restaurant industry in Latin America and the Caribbean. Today’s guests expect their QSR experience to be convenient and versatile, with multiple alternatives to receive great service and high-quality food at a fair value.

«And we are meeting their expectations with sophisticated digital capabilities, a dedication to operational excellence, convenient free-standing restaurant locations and the best menu offerings in the QSR industry. No other restaurant brand in the region can match these structural competitive advantages.

«Additionally, the business model has evolved in a way that allowed us to deliver the second-best Ebitda in US dollars for a second quarter in our history. We did this despite macroeconomic and currency headwinds in some of our largest markets and even after adjusting for a positive impact from the reduction of labor contingencies due to a favorable judgement in Brazil.

«During the first half of 2024, we opened 37 Experience of the Future (EOTF) restaurants, including 34 free-standing locations. In our biggest market, Brazil, we added 21 EOTF restaurants in the first half, including 20 new free-standing units.

«We believe we are positioned to generate sustainable US dollar cash flow growth by leveraging our structural competitive advantages. And Sustainability is about more than just financial results. It is about making a positive impact on the communities we serve through our Recipe for the Future ESG platform. Because it is the right thing to do, and it is good for business.

«Finally, it is worth reminding you that we operate in a highly under-penetrated region for both the QSR industry, as well as for the McDonald’s Brand. We see tremendous growth potential ahead and will work to capture it, as strategically and profitably as possible.»