- Total revenues of $1.1 billion established a new high for a
third quarter.
- Systemwide comparable sales1 grew 32.1% year-over-year, with
positive average check and guest volume contributing to the
result.
- Digital channel sales (from Mobile App, Delivery and Self-order
Kiosks) rose 16% versus the prior year period and represented 58%
of systemwide sales in third quarter.
- Loyalty Program implemented in three markets, grew to 12.9
million registered members2.
- Consolidated Adjusted EBITDA1 was $125.0 million, with an 11.0%
margin.
- Net Income was $35.2 million in the quarter, or $0.17 per
share.
Arcos Dorados Holdings Inc. (NYSE: ARCO) (“Arcos Dorados” or the
“Company”), Latin America and the Caribbean’s largest restaurant
chain and the world’s largest independent McDonald’s franchisee,
today reported unaudited results for the three and nine months
ended September 30, 2024.
Third Quarter 2024 Highlights
- Consolidated revenues totaled $1.1 billion, rising in US
dollars despite weaker local currencies.
- Systemwide comparable sales1 rose 32.1% versus the third
quarter of 2023, including the impact of high inflation in
Argentina over the last 12 months.
- Consolidated Adjusted EBITDA1 reached $125.0 million, with an
11.0% margin.
- Net Income was $35.2 million, with a 3.1% margin.
- Net Debt to Adjusted EBITDA leverage ratio ended the third
quarter at 1.2x, unchanged from the end of the previous
quarter.
- The Company opened 19 Experience of the Future (EOTF)
restaurants in the quarter, all of them free-standing, including 11
in Brazil.
- Digital channel sales grew 16%, including strong performances
in Mobile App and Delivery as well as the continued growth of the
Loyalty Program.
1 For definitions, please refer to page 15
of this document.
2 As of September 30, 2024.
Message from Marcelo Rabach, Chief Executive Officer
Third quarter 2024 results demonstrate the resilience of Arcos
Dorados’ business model. Sales and profitability were strong, as US
dollar revenue set a new high for a third quarter and Adjusted
EBITDA was the second highest for a third quarter. Notably,
comparable guest counts rose for the 14th consecutive quarter, with
broad-based traffic increases in the region. This helped drive
systemwide comp sales growth in all three divisions, despite more
challenging economic and consumer environments.
Our strategy, built around Digital, Delivery and Drive-thru,
remained an unmatched structural competitive advantage across all
markets. In line with McDonald’s global growth strategy, we expect
our restaurant opening pipeline to unlock even more shareholder
value, as we capture the significant expansion opportunity over the
next several years. Our balance sheet is as strong as ever, which
allows us to continue ramping up on the Fourth “D” of our strategy:
Development. With that in mind, moving forward, we will begin
referring to our Four D’s Strategy.
For the year-to-date through September, we opened 56 Experience
of the Future restaurants, including 32 openings in Brazil. And,
since the fourth quarter began, we either opened or broke ground on
all the restaurants we plan to open this year.
I believe there are so many reasons to be excited about the
future for Arcos Dorados and its shareholders, including: operating
the world’s most beloved QSR Brand, executing the successful Four
D’s Strategy, the largest market share in the region’s quick
service restaurant (QSR) industry, by far, and a strong balance
sheet to support future growth. In addition, we operate the
region’s most modernized restaurant portfolio with the highest
number of free-standing locations that we believe will continue to
be a structural competitive advantage for the foreseeable
future.
Finally, we believe we are operating in the world’s best ZIP
code. Latin America has one of the globe’s most underpenetrated QSR
industries. While it is true we have political and economic cycles,
we are the least impacted emerging market when it comes to the
serious geopolitical issues in other parts of the world. And, the
consumer class continues to grow in Latin America’s biggest
markets, which will generate growing demand for the world’s most
popular QSR Brand.
It will be our job to capitalize on these opportunities in the
years to come.
Consolidated Results
Figure 1. AD Holdings Inc Consolidated: Key Financial Results(In
millions of U.S. dollars, except as noted)
3Q23(a)
Currency Translation(b) ConstantCurrencyGrowth(c)
3Q24(a+b+c) % As Reported % Constant Currency
Total Restaurants (Units)
2,339
2,410
Sales by Company-operated Restaurants
1,075.3
(416.5)
424.6
1,083.4
0.8%
39.5%
Revenues from franchised restaurants
49.8
(14.1)
14.6
50.2
0.9%
29.3%
Total Revenues
1,125.1
(430.7)
439.2
1,133.7
0.8%
39.0%
Systemwide Comparable Sales
32.1%
Adjusted EBITDA
129.1
(33.7)
29.6
125.0
-3.2%
22.9%
Adjusted EBITDA Margin
11.5%
11.0%
-0.5 p.p. Net income (loss) attributable to AD
59.7
2.8
(27.3)
35.2
-41.0%
-45.7%
Net income attributable to AD Margin
5.3%
3.1%
-2.2 p.p. No. of shares outstanding (thousands)
210,655
210,663
EPS (US$/Share)
0.28
0.17
Arcos Dorados’ total revenues of $1.1 billion, a new high for a
third quarter, despite the challenging macroeconomic and consumer
environments in the region. Systemwide comparable sales rose 32.1%
with positive contributions from both average check and guest
volumes. The Company’s systemwide comparable sales grew 1.6x
blended inflation for the period, excluding Argentina.
The Three-D’s strategy (Digital, Delivery and Drive-thru), which
has been a key component of the Company’s success in recent years,
continues to be a structural competitive advantage across all
markets, leading to continued market share gains throughout the
Company’s footprint. According to the Company’s proprietary
research, McDonald’s brand gained five points of value share across
its operating footprint in the third quarter compared with the
prior year period.
Sales from Arcos Dorados’ Digital platform rose 16% versus the
prior year and generated 58% of systemwide sales. Guests are
increasingly choosing the seamless experience offered by the Mobile
App’s functionalities, self-order kiosks in restaurants and
McDelivery. Sales growth was strong both inside restaurants as well
as in the Company’s off-premise channels. The latter (Delivery and
Drive-thru) generated 43% of systemwide sales in the third quarter,
combined.
As of September 30, 2024, the Company’s customer relationship
management (CRM) platform had approximately 94 million unique
registered users. As of the end of October 2024, the Loyalty
Program reached almost 14 million registered members across three
markets. The Loyalty Program has become a key driver of customer
engagement, including an increase of 25% in identified sales
compared to the same period last year.
Adjusted EBITDA Bridge
($ million)
Third quarter consolidated Adjusted EBITDA reached $125.0
million, with strong local currency growth offset by an unfavorable
exchange rate environment and the ongoing economic adjustment in
Argentina. This result included a $5.6 million positive impact from
a recovery related to social security contributions in Brazil.
Consolidated Adjusted EBITDA margin was 11.0%. Food and Paper
(F&P) costs remained relatively stable when compared to the
previous year. Leverage in General and Administrative expenses
(G&A) and a better result in the Other Operating Income line
were more than offset by higher Payroll expenses and a deleveraging
of Occupancy & Other Operating expenses as a percentage of
revenue, compared with the prior year period.
Notable items in the Adjusted EBITDA reconciliation
Included in Adjusted EBITDA: The
result for the third quarter of 2024 included a $5.6 million
positive impact from a recovery related to social security
contributions in Brazil.
Excluded from Adjusted EBITDA:
There were no notable items excluded from Adjusted EBITDA in either
the third quarter of 2024 or the third quarter of 2023.
Non-operating Results
Arcos Dorados’ non-operating results for the third quarter
included a net interest expense of $8.5 million and a $2.8 million
gain from non-cash foreign exchange and derivative instruments. The
Company recorded an income tax expense of $39.6 million in the
quarter.
Net income attributable to the Company totaled $35.2 million, or
$0.17 per share, in the third quarter of 2024. Total weighted
average shares amounted to 210,663,057 in the third quarter
compared to 210,654,969 in the prior year’s quarter.
Divisional Results
Brazil Division
Figure 2. Brazil Division: Key Financial Results
(In millions of U.S. dollars, except as noted)
3Q23(a) Currency Translation(b)
ConstantCurrencyGrowth(c) 3Q24(a+b+c) % As
Reported % Constant Currency Total Restaurants
(Units)
1,113
1,160
Total Revenues
439.2
(58.7)
50.9
431.5
-1.8%
11.6%
Systemwide Comparable Sales
6.8%
Adjusted EBITDA
77.8
(10.6)
11.7
79.0
1.5%
15.1%
Adjusted EBITDA Margin
17.7%
18.3%
0.6 p.p.
Brazil’s revenues totaled $431.5 million, strongly impacted by
the material depreciation of the Brazilian real versus the prior
year. Systemwide comparable sales rose 6.8% year-over-year, or 1.6x
inflation in the period, on top of double-digit growth in the prior
year quarter.
Digital sales generated almost 70% of the division’s systemwide
sales in the period. Delivery sales rose 14% in US dollars versus
the prior year and represented 22% of systemwide sales. At the end
of October, the Loyalty program reached almost 13 million users.
The program is proving highly effective in attracting new
customers, recovering previously lost customers, and significantly
boosting frequency. "Meu Méqui" continues to evolve in the country,
strengthening customer engagement and reinforcing the Company’s
commitment to deliver personalized experiences.
Based on Company research, Brazil leads in all its brand
attributes, and achieved an all-time high “Top of Mind” score while
also improving its market-leading score as the “Favorite
Brand.”
These results reflect strong marketing activities during the
quarter. The launch of the “Why I call Méqui, Méqui” campaign
increased guests’ emotional connection with the McDonald’s Brand.
Core product sales benefitted from the “Piscininha de Cheddar” that
leveraged Brazilians’ love for melted cheddar. New flavors in
cones, McFlurry and McShake brought innovation to the Dessert
category in the quarter. The family business also benefitted from
Happy Meal licenses such as “Despicable Me 4”, which featured an
exclusive menu and special activations in restaurants.
As reported Adjusted EBITDA in the division totaled $79.0
million in the quarter, rising 1.5% in US dollars versus the prior
year period, despite the depreciation of the Brazilian currency.
Adjusted EBITDA margin was 18.3%, an expansion of 60 basis points.
Excluding the recovery related to social security contributions,
Brazil’s margin contracted 70 basis points mainly due to higher
F&P costs and Royalty expenses as a percentage of revenue.
North Latin American Division (NOLAD)
Figure 3. NOLAD Division: Key Financial Results
(In millions of U.S. dollars, except as noted)
3Q23(a) Currency Translation(b)
ConstantCurrencyGrowth(c) 3Q24(a+b+c) % As
Reported % Constant Currency Total Restaurants
(Units)
638
649
Total Revenues
295.6
(10.2)
24.3
309.7
4.8%
8.2%
Systemwide Comparable Sales
6.2%
Adjusted EBITDA
32.3
(0.9)
(0.8)
30.7
-5.0%
-2.4%
Adjusted EBITDA Margin
10.9%
9.9%
-1.0 p.p.
As reported revenues in NOLAD totaled $309.7 million, up 4.8%
versus the prior year quarter. Systemwide comparable sales rose
6.2% year-over-year, or 2.3x the division’s blended inflation in
the period, driven by strong guest traffic trends in these
markets.
The Company has been investing in the modernization and
digitalization of its restaurants in the division. As a result,
digital sales continued to grow, and increased 37% versus the prior
year, representing 40% of systemwide sales in the quarter. This
growth reflects significant increases in Delivery and Self-Order
Kiosk sales versus the prior year quarter.
In Costa Rica, the Loyalty Program was launched in May 2024 and
has rapidly gained traction among customers, with over 500,000
members joining within the first five months (representing nearly
10% of the country's population). This swift adoption has played a
crucial role in driving strong identified sales penetration in the
market.
NOLAD’s marketing campaigns focused on menu items designed for
families, with Happy Meal licenses featuring “Yu-Gi-Oh and Hello
Kitty”. Arcos Dorados also developed a collaboration with Korean
pop group BTS to enhance its chicken credentials with Gen Z
customers. The collaboration introduced a variety of Asian-inspired
sauces, special packaging and collectible characters for the iconic
Chicken McNuggets. In Mexico, “Best Burger” has successfully
increased core product sales by highlighting their unique taste and
unmatched quality.
As reported Adjusted EBITDA in the division was $30.7 million in
the quarter, down 5.0% versus the prior year in US dollars, partly
due to the depreciation of local currencies versus the prior year.
Adjusted EBITDA margin declined by 100 basis points in the period,
with lower G&A expenses offset by higher Payroll expenses as
well as an increase in Occupancy & Other Operating expenses as
a percentage of revenue.
South Latin American Division (SLAD)
Figure 4. SLAD Division: Key Financial Results
(In millions of U.S. dollars, except as noted)
3Q23(a) Currency Translation(b)
ConstantCurrencyGrowth(c) 3Q24(a+b+c) % As
Reported % Constant Currency Total Restaurants
(Units)
588
601
Total Revenues
390.3
(361.8)
364.0
392.5
0.6%
93.3%
Systemwide Comparable Sales
90.4%
Adjusted EBITDA
41.8
(41.5)
35.5
35.7
-14.5%
84.9%
Adjusted EBITDA Margin
10.7%
9.1%
-1.6 p.p.
As reported revenues in SLAD totaled $392.5 million, driven by a
90.4% increase in systemwide comparable sales versus the prior
year, which includes the effect of Argentina and Venezuela’s high
inflation rates. Excluding Argentina, the division’s systemwide
comparable sales grew 1.3x blended inflation.
Results in the third quarter reflect a more challenging consumer
environment, as well as significant macroeconomic and currency
headwinds in Argentina, which further pressured the division’s
margin. Against this backdrop, the Company focused on leveraging
its competitive advantages to strengthen value perception and brand
preference among guests, which contributed to increased value share
across the division, including an additional seven points in Chile
and four points in Argentina.
Digital sales represented 57% of systemwide sales in SLAD in the
quarter, mainly due to the strong performance of the Mobile Order
and Pay functionality on the Mobile App and the continued increase
in sales penetration from Delivery.
In Uruguay, the Loyalty Program is delivering outstanding
results. Launched in April 2024, the program boosted identified
sales penetration in this country and drove important increases in
guest frequency. These results underscore the program’s impact on
guest engagement and potential future sales growth.
The Company continued to strengthen the connection with its key
consumer targets through the Copa America soccer tournament, with
special edition sandwiches and campaigns supporting its sponsorship
of national teams. In Argentina, taking advantage of its unique
passion for soccer, the brand took over Copa America with the
“Grand Leyenda” sandwich featuring soccer super star Angel Di
María. Arcos Dorados also continued strengthening the connection
with families, with activations and campaigns related to top
licenses such as “Despicable Me 4”, “Inside Out 2” and “Yu-Gi-Oh
and Hello Kitty”, significantly improving brand attributes related
to families. The Company also kept its focus on improving the value
for money perception, building compelling entry level meals with a
strong customer response.
As reported Adjusted EBITDA totaled $35.7 million in the third
quarter, which includes the negative impact of the depreciation of
local currencies. Adjusted EBITDA margin contracted 160 basis
points versus the prior year quarter. The division’s Adjusted
EBITDA margin was positively impacted by lower F&P costs as a
percentage of revenue, despite the challenging macroeconomic
environment in Argentina. This was offset by higher Payroll and
Occupancy & Other Operating expenses as a percentage of
revenue.
New Unit Development
Figure 5. Total Restaurants (end of period)* September2024 June2024
March2024 December2023 September2023 Brazil
1,160
1,150
1,141
1,130
1,113
NOLAD
649
649
647
647
638
SLAD
601
596
593
584
588
TOTAL
2,410
2,395
2,381
2,361
2,339
* Considers Company-operated and franchised restaurants at
period-end Figure 6. Footprint as of September 30, 2024 Store Type*
TotalRestaurants Ownership McCafes DessertCenters FS IS MS & FC
CompanyOperated Franchised Brazil
610
91
459
1,160
713
447
124
2,003
NOLAD
408
47
194
649
495
154
19
524
SLAD
257
124
220
601
507
94
205
734
TOTAL
1,275
262
873
2,410
1,715
695
348
3,261
* FS: Free-Standing; IS: In-Store; MS: Mall Store; FC: Food Court.
The Company opened 19 Experience of the Future (EOTF)
restaurants in the third quarter of 2024, all of them freestanding
units, including 11 restaurants in Brazil. For the first nine
months of 2024, the Company opened 56 EOTF restaurants, including
53 freestanding units and 32 units in Brazil.
Arcos Dorados continued modernizing existing restaurants and, as
of the end of September 2024, there were 1,560 EOTF restaurants
making up 65% of the Company’s total footprint.
The restaurant development plan remains on track and the Company
expects to meet its full year guidance of 80 to 90 restaurant
openings in 2024.
Balance Sheet & Cash Flow Highlights
Figure 7. Consolidated Debt and Financial Ratios(In thousands of
U.S. dollars, except ratios)
September 30,
December 31,
2024
2023
Total Cash & cash equivalents (i)
120,807
246,767
Total Financial Debt (ii)
719,068
728,093
Net Financial Debt (iii)
598,261
481,326
LTM Adjusted EBITDA
485,340
472,304
Total Financial Debt / LTM Adjusted EBITDA ratio
1.5
1.5
Net Financial Debt / LTM Adjusted EBITDA ratio
1.2
1.0
LTM Net income attributable to AD
146,133
181,274
Total Financial Debt / LTM Net income attributable to AD ratio
4.9
4.0
Net Financial Debt / LTM Net income attributable to AD ratio
4.1
2.7
(i) Total cash & cash equivalents includes short-term
investment (ii)Total financial debt includes short-term debt,
long-term debt, accrued interest payable and derivative instruments
(including the asset portion of derivatives amounting to $68.2
million and $46.5 million as a reduction of financial debt as of
September 30, 2024 and December 31, 2023, respectively). (iii) Net
financial debt equals total financial debt less total cash &
cash equivalents.
As of September 30, 2024, total cash and cash equivalents were
$120.8 million and total financial debt (including the net
derivative instrument position) was $719.1 million. Net debt (total
financial debt minus total cash and cash equivalents) was $598.3
million, up from $481.3 million at the end of 2023, due to the
lower cash balance.
The net debt to Adjusted EBITDA leverage ratio ended the quarter
at 1.2x, unchanged from the end of the second quarter 2024.
Net cash generated from operating activities for the nine months
ended September 30, 2024, totaled $159.8 million. Cash used in net
investing activities totaled $192.2 million, including capital
expenditures of $239.2 million, partially compensated by $45.8
million in net proceeds from financial investments. Net cash used
in financing activities was $42.9 million, which included $37.9
million corresponding to the first three installments of the 2024
dividend.
Recent Developments
Moody’s Rating Action
In October 2024, Moody’s upgraded Arcos Dorados’ corporate and
senior debt rating to Ba1 from Ba2, following Brazil’s sovereign
debt rating action. To support the upgrade, Moody’s cited the
Company's solid marketing position in Latin America as the largest
independent McDonald’s franchisee worldwide. The ratings were also
supported by Arcos Dorados’ liquidity condition and geographic
diversification of the Company's solid restaurant base.
Letter of Credit
On October 25, 2024, the Company signed a letter of credit with
Banco Bilbao Vizcaya Argentaria (“BBVA”) of $45 million.
Additionally, on October 28, 2024, Arcos terminated a $45 million
letter of credit with Credit Suisse.
Revolving Credit Facility
On October 31, 2024, Arcos Dorados signed a $25 million
revolving credit facility with Banco Santander Brasil, that matures
on October 31, 2026. Each loan under this agreement will bear
interest annually at TERM SOFR plus a range between 3.20% and
3.60%.
Third Quarter 2024 Earnings Webcast
A webcast to discuss the information contained in this press
release will be held today, November 13, 2024, at 10:00 a.m. ET. In
order to access the webcast, members of the investment community
should follow this link: Arcos Dorados Third Quarter 2024 Earnings
Webcast.
A replay of the webcast will be available later today in the
investor section of the Company’s website:
www.arcosdorados.com/ir.
Definitions
In analyzing business trends, management considers a variety of
performance and financial measures which are considered to be
non-GAAP including: Adjusted EBITDA, Constant Currency basis,
Systemwide sales, and Systemwide comparable sales growth.
Adjusted EBITDA: In addition to financial measures
prepared in accordance with the general accepted accounting
principles (GAAP), this press release and the accompanying tables
use a non-GAAP financial measure titled ‘Adjusted EBITDA’.
Management uses Adjusted EBITDA to facilitate operating performance
comparisons from period to period.
Adjusted EBITDA is defined as the Company’s operating income
plus depreciation and amortization plus/minus the following
losses/gains included within other operating income (expenses),
net, and within general and administrative expenses on the
statement of income: gains from sale or insurance recovery of
property and equipment, write-offs of long-lived assets, and
impairment of long-lived assets.
Management believes Adjusted EBITDA facilitates
company-to-company operating performance comparisons by backing out
potential differences caused by variations such as capital
structures (affecting net interest expense and other financing
results), taxation (affecting income tax expense) and the age and
book depreciation of facilities and equipment (affecting relative
depreciation expense), which may vary for different companies for
reasons unrelated to operating performance. Figure 8 of this
earnings release includes a reconciliation for Adjusted EBITDA. For
more information, please see Adjusted EBITDA reconciliation in Note
9 – Segment and geographic information – of our financial
statements (6-K Form) filed today with the S.E.C.
Constant Currency basis: refers to amounts calculated
using the same exchange rate over the periods under comparison to
remove the effects of currency fluctuations from this trend
analysis. To better discern underlying business trends, this
release uses non-GAAP financial measures that segregate
year-over-year growth into two categories: (i) currency translation
and (ii) constant currency growth. (i) Currency translation
reflects the impact on growth of the appreciation or depreciation
of the local currencies in which the Company conducts its business
against the US dollar (the currency in which the Company’s
financial statements are prepared). (ii) Constant currency growth
reflects the underlying growth of the business excluding the effect
from currency translation. The Company also calculates variations
as a percentage in constant currency, which are also considered to
be non-GAAP measures, to provide a more meaningful analysis of its
business by identifying the underlying business trends, without
distortion from the effect of foreign currency fluctuations.
Systemwide sales: Systemwide sales represent measures for
both Company-operated and sub-franchised restaurants. While sales
by sub-franchisees are not recorded as revenues by the Company,
management believes the information is important in understanding
its financial performance because these sales are the basis on
which it calculates and records sub-franchised restaurant revenues
and are indicative of the financial health of its sub-franchisee
base.
Systemwide comparable sales growth: this non-GAAP
measure, refers to the change, on a constant currency basis, in
Company-operated and sub-franchised restaurant sales in one period
from a comparable period for restaurants that have been open for
thirteen months or longer (year-over-year basis) including those
temporarily closed. Management believes it is a key performance
indicator used within the retail industry and is indicative of the
success of the Company’s initiatives as well as local economic,
competitive and consumer trends. Sales by sub-franchisees are not
recorded as revenues by the Company.
About Arcos Dorados
Arcos Dorados is the world’s largest independent McDonald’s
franchisee, operating the largest quick service restaurant chain in
Latin America and the Caribbean. It has the exclusive right to own,
operate and grant franchises of McDonald’s restaurants in 20 Latin
American and Caribbean countries and territories with more than
2,400 restaurants, operated by the Company or by its
sub-franchisees, that together employ more than 100 thousand people
(as of 09/30/2024). The Company is also committed to the
development of the communities in which it operates, to providing
young people their first formal job opportunities and to utilize
its Recipe for the Future to achieve a positive environmental
impact. Arcos Dorados is listed for trading on the New York Stock
Exchange (NYSE: ARCO). To learn more about the Company, please
visit the Investors section of our website:
www.arcosdorados.com/ir.
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements. The
forward-looking statements contained herein include statements
about the Company’s business prospects, its ability to attract
customers, its expectation for revenue generation, its outlook and
guidance for 2024 and the renewal of its Master Franchise Agreement
with McDonald’s. These statements are subject to the general risks
inherent in Arcos Dorados' business. These expectations may or may
not be realized. Some of these expectations may be based upon
assumptions or judgments that prove to be incorrect. In addition,
Arcos Dorados' business and operations involve numerous risks and
uncertainties, many of which are beyond the control of Arcos
Dorados, which could result in Arcos Dorados' expectations not
being realized or otherwise materially affect the financial
condition, results of operations and cash flows of Arcos Dorados.
Additional information relating to the uncertainties affecting
Arcos Dorados' business is contained in its filings with the
Securities and Exchange Commission. The forward-looking statements
are made only as of the date hereof, and Arcos Dorados does not
undertake any obligation to (and expressly disclaims any obligation
to) update any forward-looking statements to reflect events or
circumstances after the date such statements were made, or to
reflect the occurrence of unanticipated events.
Third Quarter 2024 Consolidated Results
Figure 8. Third Quarter 2024 Consolidated
Results
(In thousands of U.S. dollars, except per
share data)
For Three-Months ended For Nine-Months ended
September 30, September 30,
2024
2023
2024
2023
REVENUES Sales by Company-operated restaurants
1,083,447
1,075,328
3,175,578
3,016,212
Revenues from franchised restaurants
50,238
49,782
150,364
140,211
Total Revenues
1,133,685
1,125,110
3,325,942
3,156,423
OPERATING COSTS AND EXPENSES Company-operated restaurant expenses:
Food and paper
(381,175)
(376,023)
(1,115,088)
(1,061,634)
Payroll and employee benefits
(207,894)
(200,904)
(603,392)
(580,286)
Occupancy and other operating expenses
(315,571)
(300,456)
(930,182)
(843,176)
Royalty fees
(67,163)
(65,058)
(198,527)
(180,317)
Franchised restaurants - occupancy expenses
(20,720)
(21,424)
(62,995)
(60,053)
General and administrative expenses
(68,070)
(67,806)
(209,682)
(202,924)
Other operating income (expenses), net
6,733
(2,364)
15,519
4,219
Total operating costs and expenses
(1,053,860)
(1,034,035)
(3,104,347)
(2,924,171)
Operating income
79,825
91,075
221,595
232,252
Net interest expense and other financing results
(8,480)
(4,973)
(39,059)
(26,960)
(Loss) gain from derivative instruments
(516)
900
733
(13,220)
Foreign currency exchange results
3,292
1,286
(15,823)
22,231
Other non-operating income (expenses), net
758
(106)
106
(100)
Income before income taxes
74,879
88,182
167,552
214,203
Income tax expense, net
(39,589)
(28,072)
(76,695)
(87,922)
Net income
35,290
60,110
90,857
126,281
Net income attributable to non-controlling interests
(76)
(389)
(502)
(785)
Net income attributable to Arcos Dorados Holdings Inc.
35,214
59,721
90,355
125,496
Net income attributable to Arcos Dorados Holdings Inc. Margin as
% of total revenues
3.1%
5.3%
2.7%
4.0%
Earnings per share information ($ per share): Basic net
income per common share
$
0.17
$
0.28
$
0.43
$
0.60
Weighted-average number of common shares outstanding-Basic
210,663,057
210,654,969
210,659,761
210,625,346
Adjusted EBITDA Reconciliation Net income attributable to
Arcos Dorados Holdings Inc.
35,214
59,721
90,355
125,496
Net income attributable to non-controlling interests
76
389
502
785
Income tax expense, net
39,589
28,072
76,695
87,922
Other non-operating income (expenses), net
(758)
106
(106)
100
Foreign currency exchange results
(3,292)
(1,286)
15,823
(22,231)
(Loss) gain from derivative instruments
516
(900)
(733)
13,220
Net interest expense and other financing results
8,480
4,973
39,059
26,960
Depreciation and amortization
45,411
37,286
133,704
105,806
Operating charges excluded from EBITDA computation
(237)
759
(2,583)
1,622
Adjusted EBITDA
124,999
129,120
352,716
339,680
Adjusted EBITDA Margin as % of total revenues
11.0 %
11.5 %
10.6 %
10.8 %
Third Quarter 2024 Results by Division
Figure 9. Third Quarter 2024 Consolidated Results by
Division
(In thousands of U.S. dollars)
For Three-Months ended as Constant
For Nine-Months ended as Constant September
30, reported Currency September 30,
reported Currency
2024
2023
Incr/(Decr)% Incr/(Decr)%
2024
2023
Incr/(Decr)% Incr/(Decr)% Revenues Brazil
431,473
439,213
-1.8%
11.6%
1,322,400
1,218,610
8.5%
13.6%
NOLAD
309,684
295,641
4.8%
8.2%
922,610
832,497
10.8%
9.7%
SLAD
392,528
390,256
0.6%
93.3%
1,080,932
1,105,316
-2.2%
105.5%
TOTAL
1,133,685
1,125,110
0.8%
39.0%
3,325,942
3,156,423
5.4%
44.8%
Operating Income (loss)
Brazil
61,157
59,374
3.0%
16.8%
186,393
156,376
19.2%
24.9%
NOLAD
17,337
21,779
-20.4%
-18.4%
48,511
54,136
-10.4%
-11.8%
SLAD
24,175
34,187
-29.3%
66.0%
58,336
97,101
-39.9%
28.6%
Corporate and Other
(22,844)
(24,265)
5.9%
-75.8%
(71,645)
(75,361)
4.9%
-94.6%
TOTAL
79,825
91,075
-12.4%
11.1%
221,595
232,252
-4.6%
-4.7%
Adjusted EBITDA Brazil
79,007
77,848
1.5%
15.1%
240,621
206,450
16.6%
22.1%
NOLAD
30,683
32,308
-5.0%
-2.4%
85,446
84,218
1.5%
0.3%
SLAD
35,705
41,780
-14.5%
84.9%
91,017
119,370
-23.8%
60.4%
Corporate and Other
(20,396)
(22,816)
10.6%
-73.8%
(64,368)
(70,358)
8.5%
-95.1%
TOTAL
124,999
129,120
-3.2%
22.9%
352,716
339,680
3.8%
15.0%
Figure 10. Average Exchange Rate per Quarter* Brazil Mexico
Argentina
3Q24
5.55
18.95
941.31
3Q23
4.88
17.07
312.54
* Local $ per 1 US$
Summarized Consolidated Balance Sheet
Figure 11. Summarized Consolidated Balance Sheets
(In thousands of U.S. dollars)
September 30, December 31,
2024
2023
ASSETS
Current assets Cash and cash equivalents
115,908
196,661
Short-term investments
4,899
50,106
Accounts and notes receivable, net
135,059
147,980
Other current assets (1)
250,123
210,531
Derivative instruments
266
—
Total current assets
506,255
605,278
Non-current assets Property and equipment, net
1,161,066
1,119,885
Net intangible assets and goodwill
67,942
70,026
Deferred income taxes
103,964
98,163
Derivative instruments
67,914
46,486
Equity method investments
16,457
18,111
Leases right of use asset
963,296
954,564
Other non-current assets (2)
74,223
106,725
Total non-current assets
2,454,862
2,413,960
Total assets
2,961,117
3,019,238
LIABILITIES AND EQUITY
Current liabilities Accounts payable
328,168
374,986
Taxes payable (3)
152,866
163,143
Accrued payroll and other liabilities
142,591
142,487
Royalties payable to McDonald’s Corporation
16,886
21,292
Provision for contingencies
1,239
1,447
Interest payable
19,069
7,447
Financial debt (4)
46,621
37,361
Operating lease liabilities
96,031
93,507
Total current liabilities
803,471
841,670
Non-current liabilities Accrued payroll and other
liabilities
21,913
27,513
Provision for contingencies
34,912
49,172
Financial debt (5)
721,558
729,771
Deferred income taxes
6,082
1,166
Operating lease liabilities
859,707
853,107
Total non-current liabilities
1,644,172
1,660,729
Total liabilities
2,447,643
2,502,399
Equity Class A shares of common stock
389,967
389,907
Class B shares of common stock
132,915
132,915
Additional paid-in capital
8,659
8,719
Retained earnings
605,986
566,188
Accumulated other comprehensive loss
(605,957)
(563,081)
Common stock in treasury
(19,367)
(19,367)
Total Arcos Dorados Holdings Inc shareholders’ equity
512,203
515,281
Non-controlling interest in subsidiaries
1,271
1,558
Total equity
513,474
516,839
Total liabilities and equity
2,961,117
3,019,238
(1) Includes "Other receivables", "Inventories" and "Prepaid
expenses and other current assets". (2) Includes "Miscellaneous"
and "Collateral deposits". (3) Includes "Income taxes payable" and
"Other taxes payable". (4) Includes "Short-term debt”, “Current
portion of long-term debt" and "Derivative instruments”. (5)
Includes "Long-term debt, excluding current portion" and
"Derivative instruments".
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241113097566/en/
Investor Relations Contact Dan Schleiniger VP of Investor
Relations Arcos Dorados daniel.schleiniger@mcd.com.uy
Media Contact David Grinberg VP of Corporate Communications
Arcos Dorados david.grinberg@mcd.com.uy Follow us on: LinkedIn
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