Arcos Dorados reported third‑quarter 2025 results that showed total revenue of $1.19 billion, a 5.2% increase in U.S. dollars from the same period last year. The figure fell slightly short of consensus estimates of $1.21 billion to $1.25 billion, but the company still delivered a solid year‑over‑year growth rate that matched its blended inflation rate of 12.7% in systemwide comparable sales.
Adjusted earnings before interest, taxes, depreciation and amortization rose to $201.1 million, giving the company a margin of 16.9%—a dramatic expansion from 11.0% in the prior quarter. The margin growth was driven by disciplined cost management and a 61% share of total sales coming from digital channels, which grew 11.2% during the period. Digital sales were especially strong in Brazil and the broader Latin‑American market, where the McDonald’s app, self‑order kiosks and own‑delivery services continue to expand.
Earnings per share reached $0.71, a $0.58 beat over the consensus estimate of $0.13. The extraordinary earnings jump was largely attributable to a one‑time federal tax credit received in Brazil, which lifted net income and, in turn, EPS. Management noted that the credit is expected to provide a cash‑flow benefit beginning in 2026, but the company’s underlying profitability remains robust due to the margin expansion and digital mix shift.
Operationally, Arcos Dorados added 22 new restaurants in the quarter, 19 of which were free‑standing. The company now reports that 72% of its portfolio operates under the modernized “Experience of the Future” concept, a strategy aimed at enhancing customer experience and driving higher returns. Digital channel growth and the rollout of the new concept are key components of the company’s growth plan.
CEO Luis Raganato emphasized that the company is “pushing to have a solid finish to 2025, while positioning ourselves for a stronger performance next year, targeting sustainable topline growth and improved operational efficiency.” The company’s outlook signals confidence in maintaining profitability amid a challenging consumer environment, while continuing to invest in digital innovation and restaurant modernization.
The results reinforce Arcos Dorados’ competitive position as the largest independent McDonald’s franchisee in Latin America and the Caribbean. The company’s ability to expand digital sales, modernize its footprint, and leverage a one‑time tax credit demonstrates operational resilience and a clear path to sustained growth in 2026.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.