Arcos Dorados: Q3 Earnings Snapshot

Arcos Dorados, the world's largest independent McDonald's franchisee, reported robust financial results for the third quarter of 2024, demonstrating the resilience of its business model amidst economic challenges. The company's sales and profitability were strong, with US dollar revenue setting a new high for a third quarter and Adjusted EBITDA reaching the second highest for a third quarter. Notably, comparable guest counts rose for the 14th consecutive quarter, driving systemwide comp sales growth in all three divisions.

The company's strategy, built around Digital, Delivery, and Drive-thru, remained a structural competitive advantage across all markets. Digital channel sales rose 16% year-over-year, representing 58% of systemwide sales in the third quarter. This growth was driven by strong performances in Mobile App, Delivery, and Self-order Kiosks, as well as the continued expansion of the loyalty program to 12.9 million registered members.



Arcos Dorados' focus on modernizing its restaurant portfolio, with the highest number of free-standing locations, is expected to continue as a structural competitive advantage for the foreseeable future. The company opened 19 Experience of the Future (EOTF) restaurants in the quarter, all of them free-standing, including 11 in Brazil. This expansion strategy has led to a 32.1% increase in systemwide comparable sales and contributed to the company's strong financial performance.

The company's balance sheet remains strong, with a net debt to Adjusted EBITDA leverage ratio of 1.2x. This financial position allows Arcos Dorados to continue investing in growth, as demonstrated by the opening of 56 EOTF restaurants in the first nine months of 2024, including 32 openings in Brazil. The company's commitment to modernizing its restaurant portfolio, combined with a focus on digital channels and delivery, has contributed to its 32.1% systemwide comparable sales growth in Q3 2024.



In summary, Arcos Dorados' Q3 earnings snapshot highlights the company's strong financial performance, driven by a focus on digital channels, delivery, and modernizing its restaurant portfolio. The company's resilient business model and strategic growth initiatives position it well to capitalize on opportunities in the years to come.