Arcos Dorados (NYSE:ARCO) Posts Quarterly Earnings Results, Misses Expectations By $0.08 EPS

Arcos Dorados (NYSE:ARCO) posted its quarterly earnings results on Thursday. The restaurant operator reported $0.12 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.20 by ($0.08), FiscalAI reports. The firm had revenue of $1.27 billion for the quarter, compared to analyst estimates of $1.26 billion. Arcos Dorados had a net margin of 5.39% and a return on equity of 20.42%. The business’s revenue was up 10.7% on a year-over-year basis. During the same period in the prior year, the company posted $0.28 earnings per share.

Here are the key takeaways from Arcos Dorados’ conference call:

• Arcos Dorados reported a strong Q4 with total revenue of $1.3 billion (+10.7%) and system‑wide comparable sales up 16%, while adjusted EBITDA rose 17.2% to $172.7 million (80 bps margin expansion); full‑year adjusted EBITDA was the highest in company history, though materially aided by recognized tax benefits.
• Digital and loyalty initiatives continue to drive share and sales, with digital channels representing 62% of sales, 27.2 million loyalty members, and the company opening 102 restaurants in 2025 while modernizing the portfolio to 73%.
• Brazil showed improving sequential trends and market‑share protection via the Economia value platform (roughly 2x nearest competitor), but consumption remains weak and beef inflation pressured margins earlier in 2025 despite gross‑margin recovery beginning in Q4 and into early 2026.
• Management executed capital‑structure optimization: a BRL $150m bank loan (matures 2029, ~2.53% USD‑equivalent) funded a tender for ~$135m of 2029 notes, lowering the average cost of debt and increasing interest deductibility.
• Cost and capital discipline are priorities — a completed G&A/headcount restructuring trims ongoing costs by >$10 million annually (with an $8.7m EBITDA add‑back), 2026 guidance calls for 105–115 openings and $275–325m CapEx, and the board raised the dividend to $0.28/share.

Arcos Dorados Price Performance

Shares of NYSE ARCO opened at $7.68 on Friday. The company has a quick ratio of 0.81, a current ratio of 0.89 and a debt-to-equity ratio of 1.32. Arcos Dorados has a 1-year low of $6.51 and a 1-year high of $8.98. The business’s fifty day moving average price is $8.16 and its two-hundred day moving average price is $7.51.

Arcos Dorados Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Tuesday, December 29th. Shareholders of record on Wednesday, December 23rd will be given a $0.07 dividend. The ex-dividend date of this dividend is Wednesday, December 23rd. This represents a $0.28 annualized dividend and a yield of 3.6%. Arcos Dorados’s dividend payout ratio (DPR) is currently 20.51%.

Hedge Funds Weigh In On Arcos Dorados

Several institutional investors have recently modified their holdings of ARCO. BNP Paribas Financial Markets lifted its position in Arcos Dorados by 0.3% in the 3rd quarter. BNP Paribas Financial Markets now owns 918,063 shares of the restaurant operator’s stock valued at $6,197,000 after purchasing an additional 2,312 shares during the last quarter. Boothbay Fund Management LLC boosted its stake in Arcos Dorados by 11.8% during the 4th quarter. Boothbay Fund Management LLC now owns 27,408 shares of the restaurant operator’s stock valued at $201,000 after purchasing an additional 2,891 shares during the period. Dodge & Cox grew its position in Arcos Dorados by 2.7% in the 4th quarter. Dodge & Cox now owns 112,966 shares of the restaurant operator’s stock worth $829,000 after purchasing an additional 3,000 shares during the last quarter. &PARTNERS grew its position in Arcos Dorados by 25.3% in the 4th quarter. &PARTNERS now owns 22,070 shares of the restaurant operator’s stock worth $162,000 after purchasing an additional 4,458 shares during the last quarter. Finally, LPL Financial LLC increased its stake in shares of Arcos Dorados by 17.9% in the fourth quarter. LPL Financial LLC now owns 33,295 shares of the restaurant operator’s stock valued at $244,000 after purchasing an additional 5,055 shares during the period. Institutional investors own 55.91% of the company’s stock.

Key Arcos Dorados News

Here are the key news stories impacting Arcos Dorados this week:

• Positive Sentiment: Company raised its quarterly dividend 16.7% to $0.07 (annualized yield ~3.6%), with record date March 30 and payment April 2 — supportive for income-focused investors.
• Positive Sentiment: Revenue beat estimates: Q4 revenue was roughly $1.27B vs. $1.26B expected and was up ~10.7% year-over-year; management highlighted strong digital channel growth on the earnings call. Article Title
• Neutral Sentiment: Earnings call transcript and full remarks are available for deeper read; useful for investors wanting management color on margins, digital mix and outlook. Article Title
• Negative Sentiment: EPS missed consensus — the company reported roughly $0.12 EPS (versus ~$0.20 consensus), with EPS well below the prior-year $0.28 level; the earnings shortfall is the primary near-term catalyst for the share weakness. Article Title
• Negative Sentiment: Some outlets report Q4 results as a loss on an adjusted basis versus estimates, amplifying the negative reaction; this highlights volatility in EPS presentation and expectations. Article Title
• Negative Sentiment: Arcos Dorados filed audited 2025 financials in a Form 6‑K where the auditor flagged Brazilian tax risks — a potential longer-term liability that increases uncertainty and risk premium on the shares. Article Title

Wall Street Analyst Weigh In

ARCO has been the subject of several recent research reports. Weiss Ratings reiterated a “hold (c-)” rating on shares of Arcos Dorados in a research note on Monday, December 29th. Zacks Research raised shares of Arcos Dorados from a “strong sell” rating to a “hold” rating in a report on Friday, November 21st. Three equities research analysts have rated the stock with a Hold rating, According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus target price of $8.70.

Arcos Dorados Company Profile

Arcos Dorados Holdings Inc is the largest independent McDonald’s franchisee in the world, operating under an exclusive license agreement with McDonald’s Corporation. The company develops, owns and operates quick-service restaurants, offering the full McDonald’s menu, including hamburgers, chicken sandwiches, salads, sides, desserts and McCafé beverages. In addition to restaurant operations, Arcos Dorados manages supply chain logistics, property development, training and support services for its franchise network.

Headquartered in Montevideo, Uruguay, Arcos Dorados serves 20 markets across Latin America and the Caribbean, including Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico and Uruguay.