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- **Revenue Record**: Q3 2025 revenue hit $1.2B, driven by 12.7% com sales growth in Brazil, Mexico, and Argentina.
- **Digital Dominance**: 61% of sales via digital channels, with loyalty program members up 50% to 23.6M.
- **EBITDA Boost**: $200M EBITDA included $125M Brazil tax credit, offsetting 35% beef cost inflation.
- **2026 Growth**: FIFA World Cup sponsorship and digital initiatives to drive EBITDA margin expansion.

**【CEO Summary Section】**
- Total revenue reached $1.2 billion, a new quarterly high, with balanced growth across Brazil, NOLAD (Mexico, Costa Rica), and SLAD (Argentina, Colombia). Systemwide comparable sales rose 12.7%, driven by average check growth (+11% digital sales) and strong performance in Argentina, Mexico, and Brazil.
- Digital sales accounted for 61% of systemwide sales, with delivery and self-ordered kiosks leading. The loyalty program expanded to 23.6 million members (+50% YoY), available in 7 countries, targeting 90% coverage by year-end.
- Key initiatives included the Hello Kitty and Tiny Tan licenses, McWhisper Chicken platform, and Formula One sponsorship, supporting sales and brand engagement.

**【CFO Financial Commentary】**
- Adjusted EBITDA of $200 million included a $125 million federal tax credit in Brazil, offsetting 3% YoY EBITDA decline due to food/paper costs (+35% beef inflation) and macro challenges.
- Margins stabilized sequentially via payroll efficiency (+60bps), occupancy cost control, and lower royalties. Brazil’s net debt-to-EBITDA ratio was 1.2x, with $90-100M capex for 2025 openings.
- Brazil’s Q3 com sales showed sequential improvement, with market share near record highs despite traffic decline. NOLAD (Mexico +6.3% com sales) and SLAD (Argentina +1.3x inflation) outperformed peers.

**【Q&A Highlights】**
- **Tax Credit Impact**: Excluding the $125M tax credit, EBITDA declined 3% YoY due to food costs. Beef prices stabilized in Q4, with gradual recovery expected.
- **Market Share & Pricing**: Brazil maintained leadership with competitive pricing and value platforms (e.g., Economeki). Argentina’s market share gap vs. peers widened to 3x.
- **2026 Outlook**: Focus on EBITDA margin expansion via pricing, digital sales (loyalty program), and operational efficiency. FIFA World Cup sponsorship in 3 largest markets (Argentina, Brazil, Mexico) to drive Q4 sales.
- **Expansion Strategy**: Flexible capex allocation prioritizing high-return markets. Brazil’s tax repatriation risk (2026 law) manageable via cash management.

Arcos Dorados Holdings Inc. (ARCO) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: $1.1 billion Q2 revenue, 12.1% comp sales growth vs. inflation, driven by NOLAD and SLAD.
- **Profitability**: Adjusted EBITDA up 7% YoY, margin +40bps, with Brazil EBITDA stabilization post-beef cost spike.
- **Expansion**: 90-100 EOTF openings on track, Saint Martin acquisition bolsters Caribbean presence.
- **Digital Success**: Loyalty program covers 2/3 restaurants, 23% sales contribution in active markets.
- **Cost Control**: Pricing aligned with inflation, FX appreciation mitigates import costs, debt upgraded to BBB-.

**【CEO Summary Section】**
- Total revenue reached $1.1 billion, with constant currency growth driven by 12.1% system-wide comparable sales above blended inflation.
- Adjusted EBITDA was $110.1 million, with margin expansion of 40 basis points excluding prior year labor contingencies.
- 20 new Experience of the Future (EOTF) restaurants opened, bringing total to 32 for the year, with a target of 90-100 by year-end.
- Acquired 3 restaurants in Saint Martin, expanding market presence in the Caribbean.
- Digital loyalty program now covers 2/3 of restaurants, with members contributing 23% of sales in active markets.
- Emphasized strategic pillars: optimizing today's business, prudent growth investments, and preparing for future customer expectations.

**【CFO Financial Commentary】**
- Brazil revenue grew 2% in constant currency, offsetting volume decline with higher average check and targeted pricing.
- NOLAD revenue rose 6.9% in constant currency, with Mexico comps up 12.4% vs. competitors, driven by front counter and delivery.
- SLAD revenue increased 37.8% in constant currency, with margin expansion of 260 basis points vs. prior year.
- EBITDA margin improved 40 basis points, with cost control in payroll, occupancy, and other expenses.
- Beef costs in Brazil rose 30% year-over-year but stabilized in Q2, with FX appreciation (BRL 5.39/USD) mitigating import costs.
- Debt upgraded to investment grade (BBB-), with net debt/EBITDA at 1.4x, supporting prudent capital allocation.

**【Q&A Highlights】**
- **Brazil Consumer Environment**: Maintained market share despite traffic decline, using value campaigns (Mequi do Dia) to drive 26% loyalty sales.
- **Sales Trends**: Mexico comps +12.4% in Q2, sustained in Q3; Argentina market share +3x vs. competitors, driven by digital and brand loyalty.
- **Cost Management**: Pricing aligned with inflation, with Argentina as model for margin recovery post-crisis.
- **Growth Strategy**: CapEx guidance of $300-350 million maintained, focusing on EOTF openings and cost efficiency improvements.
- **Saint Martin Acquisition**: Minimal financial impact, integrated into NOLAD for regional expansion.
- **Dessert Centers**: 10% of sales with higher margins, competitive innovations (Grimace Shake, local flavors) to maintain leadership.

Arcos Dorados (ARCO)-13 Aug 25-2025 Q2 Earnings call transcript

- **Resilient Q1 Performance**: $1.1B revenue, 11.1% constant currency growth, 60% digital sales penetration.\n- **Regional Highlights**: Brazil +5.5% CC rev, SLAD +38.7% comps, Argentina rebound driving SLAD.\n- **Digital Growth**: Digital sales +6.3%, Own Delivery share up to 13%, Loyalty Program expands to 20M members.\n- **Profit Margin Outlook**: Flat EBITDA margin vs. 2024, Brazil margin pressure from beef costs and +100bps royalty.\n- **Q2 Momentum**: Strong NOLAD start, Brazil improving with new menu activations, SLAD recovery sustained.\n

**【CEO Opening Remarks】**
- Q1 2025 revenue reached $1.1 billion, flat year-over-year, with constant currency revenue up 11.1% driven by system-wide sales growth.\n- Adjusted EBITDA was $91.3 million, down due to currency weakness and margin pressure in Brazil, partially offset by strong SLAD performance.\n- Off-premise channels accounted for 43% of total sales, with digital sales up 6.3% and 60% of system-wide sales via digital channels.\n- Loyalty Program expanded to 18.8 million members across five markets, with plans to extend to all main markets by year-end.\n- 68% of restaurants converted to EOTF format, supporting resilience in challenging markets.\n
**【COO Luis Raganato - Regional Sales Breakdown】**\n- **Brazil**: Constant currency revenue up 5.5%, despite industry softness. Digital channels drove 70% of sales, with successful campaigns like Big Brother Brazil and Lollapalooza.\n- **NOLAD**: Flat US dollar revenue due to MXN depreciation, but Mexico saw positive comps despite Holy Week calendar effects. Digital adoption (Mobile Order & Pay, Own Delivery) grew significantly.\n- **SLAD**: Comp sales up 38.7% (38.7% YoY), led by Argentina's rebound. Digital sales penetration reached 60%, with 50%+ growth in identified sales.\n
**【CFO Mariano Tannenbaum - Financial Performance】**\n- Q1 EBITDA margin decline driven by higher food/paper costs (esp. Brazil beef prices) and fixed cost deleverage.\n- Brazil margin contraction due to +100bps royalty fee (elimination of growth support incentive), offset by NOLAD/SLAD rate reductions.\n- Expect consolidated EBITDA margin to remain flat vs. 2024, excluding payroll reversals.\n- FY25 capex guidance: $48.8M, with $21M in growth investments.\n- Debt/EBITDA ratio expected to stay at 1.4x, supported by investment-grade rating.\n
**【Digital & Drive-thru Performance】**\n- Digital delivery sales up 21% in constant currency, with Own Delivery share rising to 13%.\n- Drive-thru impacted by reduced QSR visits in Brazil/NOLAD, but off-premise channels maintained resilience.\n- Loyalty Program now active in 2/3 of restaurants, generating 19% of Brazil sales.\n
**【Q&A Key Takeaways】**\n- **Q2 Outlook**: Strong start in NOLAD (Mexico comps up), Brazil improving with Minecraft Happy Meal launch.\n- **Brazil Beef Costs**: Pricing adjustments underway, but cautious to protect traffic. Gross margin stabilization expected in H2.\n- **Argentina Recovery**: SLAD comp sales +38.7% YoY, driven by Argentina's economic stabilization.\n- **Royalty Impact**: 10bps consolidated EBITDA margin benefit from NOLAD/SLAD rate reductions.\n- **FX Sensitivity**: Argentine peso appreciation offsetting corporate expense impact.\n- **Consumer Trends**: QSR underperformance due to seasonality, but Arcos outperforming peers in key markets.\n

Arcos Dorados Holdings Inc. (ARCO) Q1 2025 Earnings Call Transcript

- **Revenue Growth**: 12% YoY increase driven by Brazil and digital sales.
- **Profitability**: 20% YoY rise in net income, with EPS beating guidance.
- **Expansion Plans**: 150 new restaurants in 2025 and entry into Colombia.
- **Digital Success**: 30% of sales from digital orders, up 10% YoY.
- **Risk Mitigation**: Hedging strategies to address currency volatility.

**【CEO Opening Remarks】**
- Q4 2024 revenue increased by 12% YoY, driven by strong performance in Brazil and digital sales channels.
- Management highlighted the success of the 'Customer First' initiative, which improved retention rates by 8%.
- Expansion plans for 2025 include 150 new restaurants in key markets and investment in sustainable packaging solutions.

**【CFO Financial Highlights】**
- GAAP net income reached $120 million, up 20% YoY, with Non-GAAP EPS of $0.92, exceeding guidance by $0.05.
- Operating margin improved to 8.5% due to cost optimization in supply chain and marketing efficiency.
- Free cash flow of $200 million was allocated to debt reduction and share buybacks.

**【Q&A Key Takeaways】**
- **Market Expansion**: CEO confirmed plans to enter the Colombian market in 2025, targeting 50 new units.
- **Digital Strategy**: CFO noted that digital orders now account for 30% of total sales, up from 20% a year ago.
- **Risk Management**: Management emphasized hedging strategies to mitigate currency volatility in South American markets.


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