Key Highlights

  • Total revenues rose 14.3% to $1.3 billion, a Q2 record.
  • Net income rose to $45.0 million, or $0.22 per share, from $0.11.
  • Adjusted EBITDA rose 15.2% to $126.8 million, a Q2 record.
  • Shares closed at $7.99, up $0.23, or 3%, at Tuesday's close.

Arcos Dorados Holdings Inc. (NYSE:ARCO)'s second quarter set company records for a second quarter in revenue, Adjusted EBITDA and net income, as digital sales and systemwide comparable sales grew despite what management described as challenging consumer dynamics. Chief Executive Luis Raganato said total revenues, Adjusted EBITDA and Net Income all grew strongly in U.S. dollars during the quarter.

ARCO is Latin America's largest restaurant chain and the world's largest independent McDonald's franchisee. The company opened 16 restaurants during the quarter, including 10 freestanding units, bringing its total network to 2,548 locations.

Digital channel sales rose approximately 25% during the quarter and represented 66% of systemwide sales. The company said its loyalty program reached 34.3 million members, who it said visit restaurants five times more frequently than non-members.

Second quarter 2026 compared with the prior-year quarter

Total revenues reached $1.3 billion, up 14.3%. Systemwide comparable sales rose 15.3%. Consolidated Adjusted EBITDA was $126.8 million, up 15.2%, which the company said reflected a 70 basis point underlying Margin improvement after excluding a $6.9 million gain in Mexico related to restaurant transactions with a sub-franchisee recorded in the second quarter of 2025.

Net income was $45.0 million, or $0.22 per share, against $0.11 per share a year earlier, a net income margin of 3.4%, up 150 basis points, which the company attributed mainly to improved net interest expense, financing and foreign currency results, and a lower effective tax rate.

The company's net Debt to Adjusted EBITDA Leverage Ratio was 1.1x at quarter-end, against 1.2x at year-end 2025.

Management outlook and stated risks

Management said it expects dynamic conditions to persist in the second half of 2026, but said it remains confident in its operating plans, agility and financial discipline. The company said it is focused on maximizing full-year results, expanding its digital platform and strengthening the foundation for future growth.

Management said it is optimistic about continued positive trends in Brazil, NOLAD and SLAD heading into the third quarter, supported by its Marketing plans and operational execution.

Investment Takeaway

Management tied its near-term plans to its exclusive FIFA World Cup sponsorship, which it said drove strong marketing campaigns, record digital engagement and premium product sales during the quarter. The company said it intends to continue monetizing its guest connections through its loyalty and digital platforms.