ARCO · Arcos Dorados Holdings Inc.

Arcos Dorados' first quarter 2026 results reflect continued strong execution across its Latin American and Caribbean markets. Total revenue of $1.2 billion rose 12.9% year-over-year in US dollars, or 19.5% in constant currency, driven by 16.0% systemwide comparable sales growth. The growth was balanced across divisions: Brazil revenue increased 17.8% (5.8% constant currency), NOLAD up 14.5% (6.2% constant currency), and SLAD up 6.9% (43.0% constant currency). The strong SLAD constant currency growth reflects hyperinflationary accounting in Argentina.

Adjusted EBITDA reached a first-quarter record of $118.0 million, up 29.3% as reported, with margin expanding 120 basis points to 9.7%. Margin improvement was led by a 60-basis-point reduction in Food & Paper costs as a percentage of revenue, particularly in Brazil, and lower G&A expenses. Additionally, gains from restaurant transactions in NOLAD and SLAD contributed $5.8 million. Excluding these gains, core operating performance still showed solid expansion. Net income of $36.1 million ($0.17 per share) more than doubled from $13.9 million ($0.07), benefiting from higher EBITDA, favorable net interest expense, derivative gains, and foreign exchange results, partially offset by higher taxes and depreciation.

Digital channels continued to gain traction, with digital sales up about 21% and representing 64% of systemwide sales. Self-order kiosk sales benefited from an increasingly modernized restaurant base (now 75% of the portfolio), delivery sales were supported by new partnerships, and the loyalty program grew to 30.4 million registered members. The company opened 19 new restaurants in the quarter, including 13 freestanding units. Management highlighted the successful completion of a liability management transaction in March, keeping net leverage at 1.2x. The company also announced achievement of its sustainability performance targets for the 2029 Senior Notes.

While the company did not provide specific numerical guidance, management expressed confidence in building on its competitive advantages and monetizing its market share leadership through value platforms, menu innovation, and digital engagement. The upcoming Investor Day on October 1, 2026 will likely provide further strategic details.