Arcos Dorados (ARCO) Q2 2025 earnings summary

Executive summary

• Systemwide comparable sales grew 12.1% year-over-year, outpacing blended inflation and driving total revenue to $1.1 billion for Q2 2025, with strong performance in NOLAD and SLAD regions, while Brazil faced margin pressure from higher input costs.

• Digital channel sales increased 7.9% year-over-year, now representing over 60% of systemwide sales, and loyalty program members reached 21.5 million, contributing up to 26% of sales in key markets.

• Opened 20 new Experience of the Future (EOTF) restaurants in Q2, totaling 32 for H1, with a full-year target of 90–100 openings and expansion to 2,457 total units.

• Acquired three restaurants and exclusive franchise rights in Saint Martin, expanding to a 21st market.

• Net income was $22.6 million ($0.11 per share), with consolidated Adjusted EBITDA at $110.1 million.

Financial highlights

• Total revenue for Q2 2025 was $1.1 billion, rising 2.8% in US dollars and 14.9% in constant currency compared to Q2 2024.

• Adjusted EBITDA was $110.1 million, with a 9.6% margin, and grew 7.1% year-over-year excluding prior-year labor contingency reduction.

• Net income margin was 2.0%, down from 2.4% in the prior year quarter.

• Earnings per share were $0.11, compared to $0.13 in Q2 2024.

• Net cash from operating activities for the first half was $57.7 million; capex was $104.2 million.

Outlook and guidance

• Growth plan for 2025 remains on track, with CapEx guidance of $300–$350 million and 90–100 EOTF restaurant openings expected.

• Loyalty program expected to be available in all main markets by year-end 2025.

• No significant further beef cost pressures expected in Brazil for H2 2025; margin expected to remain close to 2024 levels, excluding one-offs.

• Management sees compelling long-term growth potential for the business and shareholders.

• Marketing focused on value and brand strength, with robust market share growth in many markets.