Arcos Dorados Reports Second Quarter Financial Results

• Total revenues of $1.1 billion in the quarter, up 6.8% in US dollars versus the prior year period.
• Systemwide comparable sales¹ grew 40.8% year-over-year, including strong guest volume growth.
• Digital channels (Mobile App, Delivery and Self-order Kiosks) accounted for more than 57% of systemwide sales in the period, including 24% identified sales.
• Loyalty Program implemented in three markets, grew to 11.2 million registered members2.
• Consolidated Adjusted EBITDA¹ was $118.8 million, rising 7.9% year-over-year in US dollars.
• Net Income was $26.6 million in the second quarter, or $0.13 per share.

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 and six months ended June 30, 2024.

Second Quarter 2024 Highlights

• Consolidated revenues totaled $1.1 billion, rising 6.8% in US dollars versus the prior year period.
• Systemwide comparable sales¹ rose 40.8% versus the second quarter of 2023, or 10.2% and 2.4x blended inflation, excluding Argentina.
• Consolidated Adjusted EBITDA¹ of $118.8 million, grew 7.9% in US dollars year-over-year.
• Net Debt to Adjusted EBITDA leverage ratio ended the second quarter unchanged at 1.2x from the end of the first quarter of 2024.
• The Company opened 15 Experience of the Future restaurants in the quarter, all of them free-standing, including 10 in Brazil.
• Digital channel sales growth was boosted by continued strong Delivery sales and expanding Loyalty Program membership, leading to 24% identified sales in the quarter.

1

For definitions, please refer to page 15 of this document.

2

As of July 31, 2024.

Message from Marcelo Rabach, Chief Executive Officer

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% 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 underpenetrated 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.

Consolidated Results

Figure 1. AD Holdings Inc Consolidated: Key Financial Results

(In millions of U.S. dollars, except as noted)

2Q23(a)

CurrencyTranslation(b)

ConstantCurrencyGrowth(c)

2Q24(a+b+c)

% AsReported

% ConstantCurrency

Total Restaurants (Units)

2,317

2,395

 


Sales by Company-operated Restaurants

994.5

(426.9)

493.1

1,060.7

6.7%

49.6%

Revenues from franchised restaurants

46.0

(12.2)

16.4

50.2

9.1%

35.7%

Total Revenues

1,040.5

(439.2)

509.5

1,110.9

6.8%

49.0%

Systemwide Comparable Sales

40.8%

Adjusted EBITDA

110.1

(11.2)

19.9

118.8

7.9%

18.1%

Adjusted EBITDA Margin

10.6%

10.7%

0.1 p.p.



Net income (loss) attributable to AD

28.4

43.7

(45.4)

26.6

-6.1%

-160.0%

No. of shares outstanding (thousands)

210,626

210,660

EPS (US$/Share)

0.13

0.13

Arcos Dorados’ total revenues reached $1.1 billion, up 6.8% in US dollars versus the prior year quarter, despite the challenging macroeconomic and consumer environments in the region, the significant negative impact on results from the Argentina business and the depreciation of the Brazilian real during the quarter.

Systemwide comparable sales rose 40.8% with most markets increasing sales above local inflation, including positive guest volumes. The Company’s systemwide comparable sales grew 2.4x blended inflation for the period, excluding Argentina.

The Three-D’s strategy (Digital, Delivery and Drive-thru) together with the industry’s most compelling value proposition, drove guest volume and sales growth in the quarter. This led to continued market share gains for the McDonald’s Brand throughout the region. According to the Company’s proprietary research, market share expanded by nearly three percentage points compared with the prior year period, across the Company’s operating footprint.

Off-premise sales (Delivery and Drive-thru) rose 11% in US dollars versus the prior year, and represented 45% of systemwide sales in the second quarter of 2024. On-premise sales (front counter, self-order kiosks, dessert centers and McCafé) grew 4% in US dollars year-over-year, accounting for 55% of systemwide sales in the quarter.

The Company’s Digital platform offered guests the ability to choose their preferred experience, whether through the convenience of self-order kiosks in the Company’s restaurants or through Mobile App functionalities, such as Own Delivery and Mobile Order and Pay. Digital channel sales grew 24% versus the prior year and reached 57% of systemwide sales, strongly contributing to topline performance in the quarter.

As of the end of June 2024, Arcos Dorados’ Customer Relationship Management platform had about 90 million unique registered users and the Mobile App surpassed 130 million cumulative downloads, reaching more than 21 million monthly active users in the quarter. Loyalty Program members’ visit frequency was 1.5 to 2.0x that of non-Loyalty guests in the period, with healthy levels of both 90-day active customers and redemption rates. During the quarter, identified sales represented 24% of total sales, compared with 19% in the prior year quarter.

2Q24 Adjusted EBITDA Bridge ($ million)

Second quarter consolidated Adjusted EBITDA reached $118.8 million, up 7.9% in US dollars over the prior year quarter. The result included a $16.0 million positive impact from the reduction of labor contingencies due to a favorable judgement in Brazil. Excluding this positive impact, Adjusted EBITDA was still the second highest US dollar result for a second quarter in Arcos Dorados’ history.

Consolidated Adjusted EBITDA margin was 10.7%, relatively flat versus the 10.6% EBITDA margin registered in the prior year. This included lower Food and Paper (F&P) costs as a percentage of revenue, driven by a better gross margin in Brazil, coupled with operating leverage in General and Administrative expenses (G&A) in all divisions when compared with the prior year.

These effects were partially offset by higher Occupancy & Other Operating expenses as a percentage of revenue in the second quarter, explained by an increase in expenses related to delivery fees and utilities as well as expenses related to running and maintaining the Company’s information technology tools and capabilities.

Notable items in the Adjusted EBITDA reconciliation

Included in Adjusted EBITDA: Brazil’s result in the second quarter of 2024 included a $16.0 million positive impact from the reduction of labor contingencies due to a favorable judgement.

Adjusted EBITDA in the second quarter 2024 and second quarter 2023 included a $4.2 million and a $4.0 million gain, respectively, from the sale of restaurants to sub-franchisees in Chile.

Excluded from Adjusted EBITDA: There were no notable items excluded from Adjusted EBITDA in either the second quarter of 2024 or the second quarter of 2023.

Non-operating Results

Arcos Dorados’ non-operating results for the second quarter included a net interest expense of $14.1 million and a $14.9 million loss from non-cash foreign exchange and derivative instruments. The Company recorded an income tax expense of $18.1 million in the quarter.

Net income attributable to the Company totaled $26.6 million, or $0.13 per share, in the second quarter of 2024. Total weighted average shares for the second quarter of 2024 amounted to 210,660,444 compared to 210,625,859 in the prior year’s quarter.

Divisional Results

Brazil Division

Figure 2. Brazil Division: Key Financial Results(In millions of U.S. dollars, except as noted)

2Q23(a)

CurrencyTranslation(b)

ConstantCurrencyGrowth(c)

2Q24(a+b+c)

% AsReported

% ConstantCurrency

Total Restaurants (Units)

1,098

1,150

Total Revenues

405.2

(24.6)

61.4

442.0

9.1%

15.2%

Systemwide Comparable Sales

10.2%

Adjusted EBITDA

69.1

(4.3)

21.4

86.2

24.6%

30.9%

Adjusted EBITDA Margin

17.1%

19.5%

2.4 p.p.

Brazil’s revenues increased 9.1% year-over-year, reaching $442.0 million, despite the material devaluation of the Brazilian real during the second quarter. Systemwide comparable sales rose 10.2% year-over-year, or 2.6x inflation in the period, with a strong guest traffic contribution.

Digital sales rose 23% versus the prior year and generated almost 70% of the division’s systemwide sales in the period, including 28% identified sales in the quarter. Delivery sales rose 28% in US dollars versus the prior year and reached a new quarterly sales record in the country. Off-premise channel sales represented 43% of Brazil’s systemwide sales in the quarter.

The Loyalty program “Meu Méqui” continues to drive guest frequency, with a higher average check. The Company continued to invest in the attractiveness of the program, which accumulated more than 10.5 million registered members at the end of July 2024, up from 8 million at the end of April 2024.

Brazil’s marketing campaigns included strong Happy Meal properties such as Inside Out 2 to boost the family business. Arcos Dorados continued sponsoring Big Brother Brazil, the country’s most popular reality TV program, with associated promotions to support the chicken category. The Company also ran promotions and limited time offers to strengthen brand affinity with menu favorites such as McFish, McFries, Tasty Sauce and desserts.

As reported Adjusted EBITDA in the division reached $86.2 million in the quarter, rising 24.6% versus the prior year in US dollars. Adjusted EBITDA margin was 19.5%, including lower F&P costs as a percentage of revenue and efficiencies in both Payroll and G&A due to strong sales growth above inflation in the division. The Adjusted EBITDA margin also benefited from a positive impact from the reduction of labor contingencies due to a favorable judgement in this market.

North Latin American Division (NOLAD)

Figure 3. NOLAD Division: Key Financial Results(In millions of U.S. dollars, except as noted)

2Q23(a)

CurrencyTranslation(b)

ConstantCurrencyGrowth(c)

2Q24(a+b+c)

% AsReported

% ConstantCurrency

Total Restaurants (Units)

639

649

Total Revenues

277.6

4.8

27.8

310.2

11.7%

10.0%

Systemwide Comparable Sales

7.9%

Adjusted EBITDA

28.2

0.3

(2.4)

26.2

-7.3%

-8.5%

Adjusted EBITDA Margin

10.2%

8.4%

-1.8 p.p.

As reported revenues in NOLAD totaled $310.2 million, up 11.7% in US dollars versus the prior year quarter. Systemwide comparable sales rose 7.9% year-over-year, despite a challenging comparison with the same period last year, which included strong sales during Holy Week.

Systemwide sales increased 2.5x the division’s blended inflation in the period, with sales growing above inflation in most markets and particularly strong traffic growth in Panama, Mexico and the French West Indies.

Arcos Dorados continued to invest in the modernization and digitalization of its restaurants in the division. As a result, digital sales grew 61% versus the prior year and represented 39% of systemwide sales in the quarter, benefiting from a significant increase in sales through Delivery and self-order kiosks versus the previous year. Identified sales almost doubled compared to the same quarter last year, driven by continued customer lifecycle management efforts, coupled with increasing digital campaigns and the recent launch of the Loyalty Program in Costa Rica.

NOLAD’s marketing initiatives included the launch of Best Burger in Mexico, leading to a robust comparable unit volume growth for the Big Mac, cheeseburger and the Quarter Pounder with cheese, in the country. Happy Meal sales also performed strongly in the quarter with properties such as Inside Out 2 and Minions. Arcos Dorados combined the regional Formula One sponsorship with the indulgent Grands platform to drive growth in the Three D’s. Finally, the Company introduced new menu offerings in the important chicken and dessert categories in several of the division’s markets.

As reported Adjusted EBITDA in the division was $26.2 million in the quarter, down 7.3% versus the prior year in US dollars. Adjusted EBITDA margin declined by 180 basis points in the quarter, primarily due to the impact of higher Payroll expenses as well as an increase in Occupancy & Other Operating expenses. These were partially offset by operating leverage in G&A expenses.

South Latin American Division (SLAD)

Figure 4. SLAD Division: Key Financial Results(In millions of U.S. dollars, except as noted)

2Q23(a)

CurrencyTranslation(b)

ConstantCurrencyGrowth(c)

2Q24(a+b+c)

% AsReported

% ConstantCurrency

Total Restaurants (Units)

580

596

Total Revenues

357.7

(419.3)

420.3

358.7

0.3%

117.5%

Systemwide Comparable Sales

113.4%

Adjusted EBITDA

36.9

(30.5)

24.2

30.6

-17.1%

65.7%

Adjusted EBITDA Margin

10.3%

8.5%

-1.8 p.p.

As reported revenues in SLAD totaled $358.7 million, driven by an 113.4% increase in systemwide comparable sales versus the prior year, which includes the impact of Argentina and Venezuela’s high inflation rates. Excluding Argentina, the division’s systemwide comparable sales grew 2.0x blended inflation, driven by Chile, Colombia, Uruguay and Venezuela.

The division’s results in the second quarter reflect a more challenging consumer environment, as well as significant macroeconomic and currency headwinds in Argentina. Against this backdrop, the Company focused on leveraging its competitive advantages to strengthen value perception and brand preference among guests.

Digital sales represented 56% of systemwide sales in SLAD, leading to a jump in identified sales across its markets, mainly due to the continued increase in sales penetration from Delivery and Own Delivery together with the strong performance of the Mobile Order and Pay functionality on the Mobile App. The nationwide launch of the Loyalty Program in Uruguay at the end of April of 2024 drove improvements in guest frequency and record levels of identified sales.

SLAD’s marketing activities included attractive Happy Meal offerings across the division, chicken-focused promotions in Chile, and innovations in the dessert category in Colombia. In addition, Arcos Dorados drove sales by focusing on the sports passion point during the Copa America tournament with activations related to local football federation sponsorships.

As reported Adjusted EBITDA totaled $30.6 million in the second quarter and Adjusted EBITDA margin contracted 180 basis points versus the prior year quarter. The division’s Adjusted EBITDA was positively impacted by operating leverage in G&A expenses and a relatively flat Payroll and F&P expenses as a percentage of revenue, despite the challenging environment in Argentina. These were offset by higher Occupancy & Other Operating expenses as a percentage of revenue.

New Unit Development

Figure 5. Total Restaurants (end of period)*

June2024
March2024
December2023
September2023
June2023


Brazil

1,150

1,141

1,130

1,113

1,098

NOLAD

649

647

647

638

639

SLAD

596

593

584

588

580

TOTAL

2,395

2,381

2,361

2,339

2,317

*Considers Company-operated and franchised restaurants at period-end

Figure 6. Footprint as of June 30, 2024

Store Type*
TotalRestaurants
Ownership
McCafes
DessertCenters



FS
IS
MS & FC
CompanyOperated
Franchised


Brazil

599

91

460

1,150

706

444

114

2,002

NOLAD

408

48

193

649

495

154

19

519

SLAD

250

125

221

596

503

93

201

733

TOTAL

1,257

264

874

2,395

1,704

691

334

3,254

FS: Free-Standing; IS: In-Store; MS: Mall Store; FC: Food Court.

During the second quarter of 2024, the Company opened 15 Experience of the Future (EOTF) restaurants, all of them free-standing units, including 10 restaurants in Brazil.

At the end of June, 52% of Arcos Dorados’ restaurant footprint was made up of free-standing units and the Company plans to continue focusing its investments on this format to offer guests the most complete McDonald’s restaurant experience while leveraging the incrementality of Drive-thru and Delivery sales to continue capturing the highest sales volume per restaurant in the region.

During the second quarter, the Company continued investing in the modernization of existing restaurants and, as of the end of June 2024, there were 1,471 EOTF restaurants making up 61% of the Company’s total footprint.

Arcos Dorados’ restaurant development plan remains on track, with a strong pipeline of restaurant openings and modernizations underway in the second semester.

Balance Sheet & Cash Flow Highlights

Figure 7. Consolidated Debt and Financial Ratios(In thousands of U.S. dollars, except ratios)

June 30,

December 31,

2024

2023

Total Cash & cash equivalents (i)

139,356

246,767

Total Financial Debt (ii)

716,434

728,093

Net Financial Debt (iii)

577,078

481,326

LTM Adjusted EBITDA

489,461

472,304

Total Financial Debt / LTM Adjusted EBITDA ratio

1.5

1.5

Net Financial Debt / LTM Adjusted EBITDA ratio

1.2

1.0

(i)

Total cash & cash equivalents include short-term investment.

(ii)

Total financial debt includes short-term debt, long-term debt, accrued interest payable and derivative instruments (including the asset portion of derivatives amounting to $64.7 million and $46.5 million as a reduction of financial debt as of June 30, 2024 and December 31, 2023, respectively).

(iii)

Net financial debt equals total financial debt less total cash & cash equivalents.

As of June 30, 2024, total cash and cash equivalents were $139.4 million and total financial debt (including the net derivative instrument position) was $716.4 million. Net debt (total financial debt minus total cash and cash equivalents) was $577.1 million, up from $481.3 million at the end of 2023, due to the lower cash balance.

The net debt to Adjusted EBITDA leverage ratio ended the quarter at 1.2x, unchanged from the end of the first quarter 2024.

On April 15, 2024, the Company entered into a revolving credit facility with Itaú Unibanco S.A., Nassau Branch, for up to $25 million that matures on April 14, 2025. Each loan under this agreement will bear interest at an annual rate equal to Term SOFR plus a range of between 2.65% and 4.85%.

Net cash generated from operating activities for the six months ended June 30, 2024, totaled $63.7 million. Cash used in net investing activities totaled $134.0 million, including capital expenditures of $148.9 million. Net cash used in financing activities was $17.6 million, which included $25.3 million corresponding to the first two installments of the 2024 dividend.

Recent Developments

Master Franchise Agreement

On August 1, 2024, Arcos Dorados Holdings Inc. received a Renewal Notice from McDonald’s to replace the parties’ existing Master Franchise Agreement (MFA) with a new, 20-year Master Franchise Agreement, to be effective as of January 1, 2025. The parties are working to finalize the terms of this new MFA and will communicate additional progress in the renewal process as appropriate and in line with the requirements of the US Securities and Exchange Commission.

Second Quarter 2024 Earnings Webcast

A webcast to discuss the information contained in this press release will be held today, August 14, 2024, at 10:00 a.m. ET. In order to access the webcast, members of the investment community should follow this link: Arcos Dorados Second Quarter 2024 Earnings Webcast.

A replay of the webcast will be available later today in the investor section of the Company’s website: www.arcosdorados.com/ir.

Definitions

In analyzing business trends, management considers a variety of performance and financial measures which are considered to be non-GAAP including: Adjusted EBITDA, Constant Currency basis, Systemwide sales, and Systemwide comparable sales growth.

Adjusted EBITDA: In addition to financial measures prepared in accordance with the general accepted accounting principles (GAAP), this press release and the accompanying tables use a non-GAAP financial measure titled ‘Adjusted EBITDA’. Management uses Adjusted EBITDA to facilitate operating performance comparisons from period to period.

Adjusted EBITDA is defined as the Company’s operating income plus depreciation and amortization plus/minus the following losses/gains included within other operating income (expenses), net, and within general and administrative expenses on the statement of income: gains from sale or insurance recovery of property and equipment, write-offs of long-lived assets, and impairment of long-lived assets.

Management believes Adjusted EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations such as capital structures (affecting net interest expense and other financing results), taxation (affecting income tax expense) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. Figure 8 of this earnings release includes a reconciliation for Adjusted EBITDA. For more information, please see Adjusted EBITDA reconciliation in Note 9 – Segment and geographic information – of our financial statements (6-K Form) filed today with the S.E.C.

Constant Currency basis: refers to amounts calculated using the same exchange rate over the periods under comparison to remove the effects of currency fluctuations from this trend analysis. To better discern underlying business trends, this release uses non-GAAP financial measures that segregate year-over-year growth into two categories: (i) currency translation and (ii) constant currency growth. (i) Currency translation reflects the impact on growth of the appreciation or depreciation of the local currencies in which the Company conducts its business against the US dollar (the currency in which the Company’s financial statements are prepared). (ii) Constant currency growth reflects the underlying growth of the business excluding the effect from currency translation. The Company also calculates variations as a percentage in constant currency, which are also considered to be non-GAAP measures, to provide a more meaningful analysis of its business by identifying the underlying business trends, without distortion from the effect of foreign currency fluctuations.

Systemwide sales: Systemwide sales represent measures for both Company-operated and sub-franchised restaurants. While sales by sub-franchisees are not recorded as revenues by the Company, management believes the information is important in understanding its financial performance because these sales are the basis on which it calculates and records sub-franchised restaurant revenues and are indicative of the financial health of its sub-franchisee base.

Systemwide comparable sales growth: this non-GAAP measure, refers to the change, on a constant currency basis, in Company-operated and sub-franchised restaurant sales in one period from a comparable period for restaurants that have been open for thirteen months or longer (year-over-year basis) including those temporarily closed. Management believes it is a key performance indicator used within the retail industry and is indicative of the success of the Company’s initiatives as well as local economic, competitive and consumer trends. Sales by sub-franchisees are not recorded as revenues by the Company.

About Arcos Dorados

Arcos Dorados is the world’s largest independent McDonald’s franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 20 Latin American and Caribbean countries and territories with more than 2,350 restaurants, operated by the Company or by its sub-franchisees, that together employ more than 100 thousand people (as of 06/30/2024). The Company is also committed to the development of the communities in which it operates, to providing young people their first formal job opportunities and to utilize its Recipe for the Future to achieve a positive environmental impact. Arcos Dorados is listed for trading on the New York Stock Exchange (NYSE: ARCO). To learn more about the Company, please visit the Investors section of our website: www.arcosdorados.com/ir.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements. The forward-looking statements contained herein include statements about the Company’s business prospects, its ability to attract customers, its expectation for revenue generation, its outlook and guidance for 2024 and the renewal of its Master Franchise Agreement with McDonald’s. These statements are subject to the general risks inherent in Arcos Dorados' business. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados' business and operations involve numerous risks and uncertainties, many of which are beyond the control of Arcos Dorados, which could result in Arcos Dorados' expectations not being realized or otherwise materially affect the financial condition, results of operations and cash flows of Arcos Dorados. Additional information relating to the uncertainties affecting Arcos Dorados' business is contained in its filings with the Securities and Exchange Commission. The forward-looking statements are made only as of the date hereof, and Arcos Dorados does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events.

Second Quarter 2024 Consolidated Results

Figure 8. Second Quarter 2024 Consolidated Results(In thousands of U.S. dollars, except per share data)

For Three-Months ended

For Six-Months ended

June 30,

June 30,

2024

2023

2024

2023

REVENUES






Sales by Company-operated restaurants

1,060,709

994,530

2,092,131

1,940,884

Revenues from franchised restaurants

50,192

45,991

100,126

90,429

Total Revenues

1,110,901

1,040,521

2,192,257

2,031,313

OPERATING COSTS AND EXPENSES






Company-operated restaurant expenses:






Food and paper

(372,926)

(351,745)

(733,913)

(685,611)

Payroll and employee benefits

(193,538)

(194,065)

(395,498)

(379,382)

Occupancy and other operating expenses

(315,558)

(278,997)

(614,611)

(542,720)

Royalty fees

(66,361)

(58,520)

(131,364)

(115,259)

Franchised restaurants - occupancy expenses

(20,285)

(20,420)

(42,275)

(38,629)

General and administrative expenses

(72,954)

(69,526)

(141,612)

(135,118)

Other operating income, net

4,940

7,644

8,786

6,583

Total operating costs and expenses

(1,036,682)

(965,629)

(2,050,487)

(1,890,136)

Operating income

74,219

74,892

141,770

141,177

Net interest expense and other financing results

(14,141)

(12,128)

(30,579)

(21,987)

Gain / (Loss) from derivative instruments

3,182

(9,191)

1,249

(14,120)

Foreign currency exchange results

(18,117)

13,662

(19,115)

20,945

Other non-operating income / (expenses), net

(223)

116

(652)

6

Income before income taxes

44,920

67,351

92,673

126,021

Income tax expense, net

(18,145)

(38,824)

(37,106)

(59,850)

Net income

26,775

28,527

55,567

66,171

Net income attributable to non-controlling interests

(143)

(159)

(426)

(396)

Net income attributable to Arcos Dorados Holdings Inc.

26,632

28,368

55,141

65,775

Earnings per share information ($ per share):

Basic net income per common share

$ 0.13

$ 0.13

$ 0.26

$ 0.31

Weighted-average number of common shares outstanding-Basic

210,660,444

210,625,859

210,658,096

210,610,288

Adjusted EBITDA Reconciliation

Operating income

74,219

74,892

141,770

141,177

Depreciation and amortization

45,202

35,000

88,293

68,520

Operating charges excluded from EBITDA computation

(639)

164

(2,346)

863

Adjusted EBITDA

118,782

110,056

227,717

210,560

Adjusted EBITDA Margin as % of total revenues

10.7 %

10.6 %

10.4 %

10.4 %

Second Quarter 2024 Results by Division

Figure 9. Second Quarter 2024 Consolidated Results by Division(In thousands of U.S. dollars)

For Three-Months ended

as

Constant

For Six-Months ended

as

Constant

June 30,

reported

Currency

June 30,

reported

Currency

2024

2023

Incr/(Decr)%

Incr/(Decr)%

2024

2023

Incr/(Decr)%

Incr/(Decr)%

Revenues

Brazil

441,990

405,199

9.1 %

15.2%

890,927

779,397

14.3 %

14.8%

NOLAD

310,205

277,590

11.7 %

10.0%

612,926

536,856

14.2 %

10.5%

SLAD

358,706

357,732

0.3%

117.5%

688,404

715,060

-3.7%

112.1%

TOTAL

1,110,901

1,040,521

6.8 %

49.0%

2,192,257

2,031,313

7.9 %

47.9%

Operating Income (loss)

Brazil

68,194

52,912

28.9 %

35.2%

125,236

97,002

29.1 %

29.9%

NOLAD

13,191

18,410

-28.3%

-29.1%

31,174

32,357

-3.7%

-7.3%

SLAD

19,719

29,452

-33.0%

25.2%

34,161

62,914

-45.7%

8.3%

Corporate and Other

(26,885)

(25,882)

-3.9%

-97.5%

(48,801)

(51,096)

4.5%

-103.6%

TOTAL

74,219

74,892

-0.9%

-6.0%

141,770

141,177

0.4 %

-15.0%

Adjusted EBITDA

Brazil

86,168

69,129

24.6 %

30.9%

161,614

128,602

25.7 %

26.3%

NOLAD

26,161

28,210

-7.3%

-8.5%

54,763

51,910

5.5 %

1.9%

SLAD

30,571

36,874

-17.1%

65.7%

55,312

77,590

-28.7%

47.3%

Corporate and Other

(24,118)

(24,157)

0.2%

-96.4%

(43,972)

(47,542)

7.5%

-105.3%

TOTAL

118,782

110,056

7.9 %

18.1%

227,717

210,560

8.1 %

10.2%

Figure 10. Average Exchange Rate per Quarter*

 

Brazil

Mexico

Argentina

2Q24

5.22

17.26

885.90

2Q23

4.95

17.68

231.76

* Local $ per 1 US$

Summarized Consolidated Balance Sheet

Figure 11. Summarized Consolidated Balance Sheets(In thousands of U.S. dollars)

June 30,

December 31,

2024

2023

ASSETS

Current assets

Cash and cash equivalents

104,216

196,661

Short-term investments

35,140

50,106

Accounts and notes receivable, net

141,156

147,980

Other current assets (1)

232,257

210,531

Derivative instruments

364

—

Total current assets

513,133

605,278

Non-current assets

Property and equipment, net

1,104,280

1,119,885

Net intangible assets and goodwill

66,930

70,026

Deferred income taxes

102,709

98,163

Derivative instruments

64,309

46,486

Equity method investments

17,483

18,111

Leases right of use asset

927,721

954,564

Other non-current assets (2)

99,458

106,725

Total non-current assets

2,382,890

2,413,960

Total assets

2,896,023

3,019,238

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

332,993

374,986

Taxes payable (3)

168,498

163,143

Accrued payroll and other liabilities

144,292

142,487

Royalties payable to McDonald’s Corporation

19,843

21,292

Provision for contingencies

1,360

1,447

Interest payable

8,048

7,447

Financial debt (4)

48,462

37,361

Operating lease liabilities

93,122

93,507

Total current liabilities

816,618

841,670

Non-current liabilities

Accrued payroll and other liabilities

20,686

27,513

Provision for contingencies

32,146

49,172

Financial debt (5)

724,597

729,771

Deferred income taxes

1,598

1,166

Operating lease liabilities

829,850

853,107

Total non-current liabilities

1,608,877

1,660,729

Total liabilities

2,425,495

2,502,399

Equity

Class A shares of common stock

389,967

389,907

Class B shares of common stock

132,915

132,915

Additional paid-in capital

8,659

8,719

Retained earnings

570,772

566,188

Accumulated other comprehensive loss

(613,597)

(563,081)

Common stock in treasury

(19,367)

(19,367)

Total Arcos Dorados Holdings Inc shareholders’ equity

469,349

515,281

Non-controlling interest in subsidiaries

1,179

1,558

Total equity

470,528

516,839

Total liabilities and equity

2,896,023

3,019,238

(1)

Includes "Other receivables", "Inventories" and "Prepaid expenses and other current assets”.

(2)

Includes "Miscellaneous" and "Collateral deposits".

(3)

Includes "Income taxes payable" and "Other taxes payable".

(4)

Includes "Short-term debt”, “Current portion of long-term debt" and "Derivative instruments”.

(5)

Includes "Long-term debt, excluding current portion" and "Derivative instruments".

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240814590617/en/

Investor Relations Contact Dan Schleiniger VP of Investor Relations Arcos Dorados [e-mail] Media Contact David Grinberg VP of Corporate Communications Arcos Dorados [e-mail] Follow us on: LinkedIn Instagram X YouTube