Arcos Dorados : Reports 1Q 2025 Financial Results
ARCO
Published on 05/14/2025 at 07:23
Arcos Dorados
First Quarter
2025 Results
May 14, 2025
Systemwide Comparable Sales1 grew 11.1% versus the prior year, contributing to total company revenues of $1.1 billion in the first quarter of 2025.
Digital channel sales (from Mobile App, Delivery and Self-order Kiosks) rose 6.3% year-over-year in US dollars and contributed almost 60% of total systemwide sales in the quarter.
The Loyalty Program had 18.8 million registered members at the end of the first quarter of 2025, across five available markets, and was recently introduced in a sixth market.
Consolidated Adjusted EBITDA1 was $91.3 million and Net Income was $13.9 million, or $0.07 per share, in the first quarter of 2025.
Net Debt to Adjusted EBITDA leverage ratio was 1.4x as of March 31, 2025.
Montevideo, Uruguay, May 14, 2025 - Arcos Dorados Holdings Inc. (NYSE: ARCO) ("Arcos Dorados" or the "Company"), Latin America and the Caribbean's largest restaurant chain and the world's largest independent McDonald's franchisee, today reported unaudited results for the three months ended March 31, 2025.
Consolidated revenues totaled $1.1 billion, relatively flat versus the prior year in US dollars, despite strong currency depreciations in the Company's three largest markets.
Systemwide comparable sales1 grew 11.1%, in-line with the Company's blended inflation.
The Loyalty Program reached 18.8 million registered members at the end of the quarter, supporting increased frequency and higher average check in available markets.
Consolidated Adjusted EBITDA was $91.3 million, with an 8.5% margin on total revenues.
Net Income was $13.9 million, with a 1.3% margin on total revenues.
The Company opened 12 Experience of the Future (EOTF) restaurants in the quarter, including 10 free-standing locations.
1 For definitions, please refer to page 15 of this document.
The beginning of 2025 was in-line with our expectations when we said the first quarter should be the low point of the year. Importantly, operating performance improved sequentially in the first quarter, with the best results coming in March, and we continue to expect better performance as the year progresses.
Our optimism is rooted in the belief that Arcos Dorados is uniquely positioned within Latin America's quick service restaurant (QSR) industry given the strength of our brand, the success of our strategy, the geographic diversification of our operating footprint and the numerous competitive advantages of our business model. These strengths should help Arcos Dorados navigate today's volatile and challenging market conditions better than any other restaurant operator in the region.
For the first quarter, total revenue reached $1.1 billion, which was flat versus last year in US dollars. By focusing on the factors we control, we generated 11.1% systemwide comparable sales growth and drove total revenue 14.1% higher in constant currency. As a result, local currency growth was sufficient to offset (i) the strong depreciation of our three main currencies over the last twelve months, (ii) the comparison with Leap Day in last year's results and (iii) the comparison with Holy Week, which was in the first quarter of last year.
Consolidated Adjusted EBITDA was $91.3 million in the quarter. Argentina and Chile rebounded strongly versus the prior year, driving SLAD's profitability higher in US dollars. Consolidated profitability declined versus last year due mainly to weaker local currencies and margin pressures in Brazil.
Digital sales rose 6.3%, boosted by almost 19 million monthly average Mobile App users. Digital sales penetration was almost 60% of systemwide sales in the first quarter, with notable strength in Loyalty, Mobile Order and Pay, Own Delivery and Self-order Kiosks. The Loyalty Program continued to drive higher frequency and average check among its 18.8 million registered members and across the five markets where it was available during the quarter.
Our strategy is about providing guests with an omnichannel experience, allowing them to choose when, where and how they enjoy their favorite McDonald's menu items. As a result, even as consumers pulled back on eating out of home during the quarter, off-premise channels remained resilient, generating about 43% of total systemwide sales in the quarter.
No other QSR operator in the region offers guests as accessible, diverse and modernized restaurant base as Arcos Dorados. This is why our results have continued to outshine the competition, no matter the operating context, and why we remain confident in the Company's future growth and shareholder value generation.
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1 Consolidated
Results
Figure 1.
(In millions of U.S. dollars, except as noted)
Currency
1Q24 Translation
(a) (b)
Constant Currency Growth
(c)
1Q25
(a+b+c)
% As Reported
%
Constant Currency
Total Restaurants (Units)
2,381
2,439
Sales by Company-operated Restaurants
1,031.4
(148.2)
144.3
1,027.5
-0.4%
14.0%
Revenues from franchised restaurants
49.9
(8.8)
8.0
49.1
-1.7%
15.9%
Total Revenues
1,081.4
(157.1)
152.3
1,076.6
-0.4%
14.1%
Systemwide Comparable Sales
11.1%
Adjusted EBITDA
108.9
(13.1)
(4.6)
91.3
-16.2%
-4.2%
Adjusted EBITDA Margin
10.1%
8.5%
-1.6 p.p.
Net income (loss) attributable to AD
28.5
(2.6)
(12.0)
13.9
-51.1%
-42.0%
Net income attributable to AD Margin
2.6%
1.3%
-1.3 p.p.
No. of shares outstanding (thousands)
210,656
210,663
EPS (US$/Share)
0.14
0.07
Arcos Dorados' total revenues reached $1.1 billion, nearly flat in US dollars versus the prior year quarter. Total revenues grew 14.1% in constant currency, supported by 11.1% higher systemwide comparable sales. Slower underlying growth was explained by the comparison with both Leap Day and Holy Week while the US dollar result was further impacted by the strong depreciation of several local currencies versus the prior year.
The Company's strategy proved its resilience in the first quarter of 2025 with sustained US dollar growth in Digital and Delivery sales, stable Drive-thru sales and the continued modernization and expansion of its restaurant portfolio.
Digital sales rose 6.3% in the period, helped by close to 19 million monthly average users of the Mobile App. Digital channels generated almost 60% of systemwide sales in the quarter, including notable sales strength in Loyalty, Self-order Kiosks, Mobile Order and Pay and Own Delivery.
The Company's Loyalty Program had 18.8 million registered members at the end of the first quarter of 2025. Argentina and Colombia were added to the Program during the quarter, joining Brazil, Costa Rica and Uruguay, which were added prior to 2025. Loyalty continued to gain traction with guests, generating 19% of total sales in Brazil, Costa Rica and Uruguay, with very encouraging early results in Argentina and Colombia as well. The Loyalty Program's lifecycle management strategies continued to support increased customer lifetime value as well as a 12% increase in the Mobile App's identified sales.
At the end of April 2025, Ecuador became the sixth market to offer the Loyalty Program to its guests. The Program is now active in 67% of all restaurants in the Company's footprint and remains on target to be available in all main markets by year-end 2025.
Drive-thru sales accounted for about 24% of systemwide sales, which has been the level for the last several quarters. Arcos Dorados continues to enjoy a structural competitive advantage with this sales channel given its market leading freestanding restaurant portfolio.
The digitalization of Arcos Dorados included the implementation of a new employee scheduling system in NOLAD and SLAD's restaurants in 2024. The system, which is being optimized in 2025, helped improve productivity during the quarter, leading to a reduction in Payroll expenses as a percentage of revenue compared with the prior year period.
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Disclaimer
Arcos Dorados Holdings Inc. published this content on May 14, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 14, 2025 at 11:22 UTC.