Arcos Dorados Holdings Inc.
- Open
- 8.14
- Day high
- 8.21
- Day low
- 8.11
- Prev close
- 8.17
- Volume
- 55K
- Mkt cap
- $1.7B
- P/E (TTM)
- 7.4
- EPS (TTM)
- $1.11
- P/B
- 2.2
- P/S
- 0.4
- Yield
- 3.18%
- Per share
- $0.26
- ▼Insiders net selling -$180K over the last 3 months (0 open-market buys, 1 sale)
- 🏛Institutions mixed (13F)
Arcos Dorados Holdings Inc. (ARCO) is a Consumer Cyclical company listed on NYSE. The stock is up 14% over the past year. Over the trailing 3 months, insiders filed 0 open-market buys and 1 sale (SEC Form 4).
Arcos Dorados Holdings Inc. (ARCO) financials & analyst ratings
Fundamentals (TTM)
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
ARCO earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| May 20, 2026 | $0.11 | $0.17 | +54.5% | $1.2B | +0.5% |
| Mar 19, 2026 | $0.20 | $-0.04 | -119.7% | $1.3B | +0.3% |
| Nov 12, 2025 | $0.10 | $0.12 | +20.0% | $1.2B | -5.5% |
| Aug 13, 2025 | $0.05 | $0.11 | +120.0% | $1.1B | -5.1% |
| May 14, 2025 | $0.13 | $0.07 | -46.2% | $1.1B | -8.8% |
| Mar 12, 2025 | $0.22 | $0.28 | +27.3% | $1.1B | +9.4% |
| Nov 13, 2024 | $0.16 | $0.17 | +6.3% | $4.5B | +290.1% |
| Aug 14, 2024 | $0.13 | $0.13 | +0.0% | $1.1B | +5.0% |
| May 15, 2024 | $0.17 | $0.14 | -17.6% | $1.1B | +6.0% |
| Mar 13, 2024 | $0.32 | $0.26 | -18.8% | $1.2B | -0.0% |
| Nov 16, 2023 | $0.20 | $0.30 | +50.0% | $1.1B | -10.2% |
| Aug 17, 2023 | $0.14 | $0.13 | -7.1% | $1.0B | -2.3% |
ARCO insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| May 28, 2026 | Hernandez Artigas Carlosdirector | Sell | 20,000 | $9.01 |
| May 12, 2026 | Berman Martin Karla Paoladirector | Grant | 4,435 | — |
| May 12, 2026 | CHU MICHAELdirector | Grant | 4,435 | — |
| May 12, 2026 | Fernandez Jose Rauldirector | Grant | 4,435 | — |
| May 12, 2026 | FRANQUI ANNETTEdirector | Grant | 4,435 | — |
| May 12, 2026 | Gonzalez Avila Carlos Eduardoofficer: Chief Operating Officer | Option | 7,522 | — |
| May 12, 2026 | Gonzalez Avila Carlos Eduardoofficer: Chief Operating Officer | Grant | 22,610 | — |
| May 12, 2026 | Staton Aliciadirector | Grant | 12,789 | — |
| May 12, 2026 | Hernandez Artigas Carlosdirector | Grant | 4,435 | — |
| May 12, 2026 | De Luca Cristina Presz Palmakadirector | Grant | 4,435 | — |
| May 12, 2026 | Alonso Sergio Danieldirector | Grant | 4,435 | — |
| May 12, 2026 | Raganato Luis Albertoofficer: Chief Executive Officer | Option | 24,239 | — |
| May 12, 2026 | Raganato Luis Albertoofficer: Chief Executive Officer | Grant | 50,998 | — |
| May 12, 2026 | Tannenbaum Marianoofficer: Chief Financial Officer | Option | 22,526 | — |
| May 12, 2026 | Tannenbaum Marianoofficer: Chief Financial Officer | Grant | 30,266 | — |
Source: ARCO SEC Form 4 filings, latest May 28, 2026. For informational purposes only — not investment advice.
See the full ARCO insider & 13F page →Arcos Dorados Holdings Inc. company profile
Overview
Arcos Dorados Holdings Inc. (NYSE:ARCO) is the world's largest McDonald's franchisee, operating as the exclusive master franchisee for McDonald's restaurants across 20 countries and territories in Latin America and the Caribbean. Founded in 2007 and headquartered in Montevideo, Uruguay, the company went public in 2011. Arcos Dorados has grown to operate or franchise over 2,260 McDonald's restaurants across its territory, serving markets including Brazil, Mexico, Argentina, Chile, Colombia, and 15 other countries in the region. The company has established itself as the dominant quick-service restaurant operator in Latin America, leveraging McDonald's global brand recognition while adapting to local market preferences and economic conditions.
Business
Arcos Dorados operates in the quick-service restaurant (QSR) industry, specifically as a McDonald's master franchisee. The quick-service restaurant sector focuses on providing fast, affordable food with standardized menus, efficient service, and consistent quality across locations. Unlike traditional restaurants, QSR establishments prioritize speed of service, typically offering drive-through options, counter service, and increasingly, digital ordering and delivery capabilities. The company's core business revolves around operating McDonald's restaurants under three main geographical segments: 1. Brazil Division - The largest and most profitable segment, generating approximately 50-55% of total revenues. Brazil represents the company's most mature market with the highest digital penetration, where digital channels account for nearly 70% of sales. This division benefits from Brazil's large population and relatively stable economic conditions compared to other Latin American markets. 2. NOLAD (North Latin America Division) - Comprising Mexico and Central American markets, this segment contributes roughly 30-35% of revenues. Mexico serves as the anchor market in this division, representing a significant growth opportunity given its proximity to the United States and large consumer base. 3. SLAD (South Latin America Division) - Including Argentina, Chile, Colombia, Peru, Uruguay, and other South American markets, accounting for approximately 15-20% of revenues. This division faces more economic volatility, particularly in Argentina, but offers substantial long-term growth potential as these markets remain underpenetrated compared to developed countries. The company operates through a combination of company-owned restaurants and sub-franchised locations, with the majority being company-operated. Arcos Dorados has been investing heavily in modernizing its restaurant portfolio through McDonald's "Experience of the Future" (EOTF) format, which features digital menu boards, table service, mobile ordering kiosks, and enhanced restaurant layouts designed to improve customer experience and operational efficiency.
Revenue model
Arcos Dorados generates revenue primarily through restaurant sales from its McDonald's locations, operating under a master franchise agreement with McDonald's Corporation. The company pays McDonald's a percentage of sales as franchise fees while retaining the majority of restaurant revenues. Revenue streams include food and beverage sales, with customers paying directly at restaurants, through drive-through service, via digital ordering platforms, and through third-party delivery services. The company's business model benefits from multiple revenue channels: traditional in-restaurant dining, drive-through service (representing a significant portion of sales), digital ordering through McDonald's mobile app, and delivery partnerships with third-party platforms. Digital sales have become increasingly important, growing to represent 58% of total sales by Q4 2024, with the company's mobile app downloaded over 147 million times across its markets. Several factors influence Arcos Dorados' profitability and margins. Positive margin drivers include the company's scale advantages in purchasing and supply chain management, ongoing restaurant modernization through EOTF upgrades that improve operational efficiency, growing digital penetration which reduces labor costs and increases average transaction sizes, and the expansion of higher-margin products like coffee and chicken. The company's loyalty program, which reached 15.8 million members by 2024, drives increased visit frequency and higher average checks. Margin pressures come from several sources, including commodity cost inflation (particularly beef prices in Brazil), increased delivery commissions paid to third-party platforms, higher labor costs across Latin American markets, and significant capital investments in restaurant modernization and digital infrastructure. Currency fluctuations also impact margins, as the company reports in U.S. dollars while operating primarily in local currencies that can be volatile. Additionally, economic downturns in key markets like Argentina can pressure same-store sales and overall profitability, though the company's geographic diversification helps mitigate country-specific risks.
Competitive moat
Arcos Dorados possesses a moderately strong competitive moat built primarily on its exclusive master franchise relationship with McDonald's, one of the world's most recognized and valuable brands. This relationship provides significant barriers to entry, as competitors cannot replicate the McDonald's brand recognition, standardized operating procedures, global marketing support, and supply chain advantages that come with the franchise system. The company's moat is strengthened by its scale advantages across Latin America, where it operates over 2,260 locations, providing substantial leverage in supplier negotiations, shared marketing costs, and operational efficiencies. The geographic diversification across 20 markets also provides some protection against country-specific economic volatility, though this can be a double-edged sword during regional economic downturns. Digital infrastructure investments have created additional competitive advantages, with the company's mobile app and loyalty program generating valuable customer data and increasing switching costs. The 15.8 million loyalty program members represent a significant asset that drives repeat visits and higher average transaction values. However, the moat faces several challenges. The company operates in highly competitive QSR markets where local and international competitors can offer similar products at competitive prices. Economic sensitivity in Latin American markets creates vulnerability during economic downturns, as consumers may trade down to even cheaper alternatives or reduce dining frequency. The master franchise agreement, while providing brand strength, also limits strategic flexibility and requires ongoing franchise fee payments to McDonald's Corporation. Potential disruption could come from changing consumer preferences toward healthier options, increased competition from local QSR chains that better understand regional tastes, economic instability in key markets, or potential changes in the master franchise agreement terms. The company's dependence on McDonald's global brand strategy also means it has limited control over menu innovations, pricing strategies, or brand positioning that might better suit local market conditions.
Risks & safety
Arcos Dorados presents a moderate margin of safety with some financial strengths offset by structural challenges and regional economic exposure. • Liquidity and Debt: Cash position of $135 million provides limited cushion relative to operations. Current ratio of 0.61 indicates potential short-term liquidity pressure. Debt-to-equity ratio of 3.39 represents high leverage, though manageable given cash flow generation. Net debt-to-EBITDA ratio of approximately 1.4x is reasonable for the restaurant industry. • Valuation Metrics: Trading at P/E ratio of 6.6x and EV/EBITDA of 5.3x suggests attractive valuation relative to historical levels and industry peers. Price-to-book ratio of 3.0x reflects asset-heavy business model typical of restaurant operators. • Cash Generation: Operating cash flow of $267 million for 2024 demonstrates solid cash generation capability. Free cash flow volatility due to high capital expenditure requirements for restaurant modernization and expansion. • Other Considerations: Geographic concentration in economically volatile Latin American markets creates earnings uncertainty. Master franchise agreement renewal provides stability but also dependence on McDonald's Corporation relationship. Strong market positions in key markets provide some defensive characteristics.
Recent development
Over the past few years, Arcos Dorados has undergone significant strategic transformation centered around its "Four D's Strategy" - Digital, Delivery, Drive-thru, and Development. The company has heavily invested in digital infrastructure, with digital sales growing from 42% of total sales in 2022 to 58% by Q4 2024. The McDonald's mobile app has been downloaded 147 million times across its markets, and the company launched a comprehensive loyalty program that reached 15.8 million members by 2024, adding 12.6 million new members in 2024 alone. Restaurant modernization has been a key focus, with the company converting restaurants to McDonald's "Experience of the Future" (EOTF) format. By 2024, 67% of the restaurant portfolio had been upgraded to EOTF standards, featuring digital menu boards, mobile ordering kiosks, and enhanced layouts. The company opened 85 EOTF restaurants in 2024 and plans to open 90-100 additional locations in 2025. The company achieved several financial milestones, reaching $500 million in annual EBITDA for the first time in 2024 and achieving its highest-ever EBITDA margin of 11.2%. Moody's upgraded the company's debt rating to Ba1 with a stable outlook, reflecting improved financial performance and market position. Geographic expansion and market share gains have been consistent across all three divisions, with the company maintaining or expanding market leadership positions in key markets. The company successfully renewed its Master Franchise Agreement with McDonald's for a new 20-year term beginning January 1, 2025, providing long-term operational stability. Recent strategic initiatives include enhanced delivery partnerships, expanded coffee and chicken offerings to capture higher-margin categories, and continued investment in supply chain optimization. The company has also maintained focus on ESG initiatives, progressing toward sustainability goals including renewable energy usage and cage-free egg commitments.
ARCO company profile · for informational purposes only — not investment advice.
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