Arcos Dorados Reports Q2 Earnings Beat, Sees Growth in Digital Sales

Arcos Dorados Holdings, the master franchisee of McDonald's in 20 countries and territories across Latin America and the Caribbean, reported Q2 earnings per share of 11 cents, beating the analyst consensus estimate of 7 cents. Quarterly sales of $1.142 billion (+2.8% YoY) outpaced the Street view of $1.137 billion, and systemwide comparable sales rose 12.1% YoY. Digital channel sales grew 7.9% and accounted for over 60% of total sales in the quarter.

Arcos Dorados Holdings Inc. (NYSE: ARCO), the master franchisee of McDonald's in 20 countries and territories across Latin America and the Caribbean, reported its Q2 2025 earnings on Wednesday, August 13th, before the market open. The company's earnings per share (EPS) of 11 cents exceeded the analyst consensus estimate of 7 cents. Quarterly sales reached $1.142 billion, a 2.8% year-over-year (YoY) increase, surpassing the Street's view of $1.137 billion. Systemwide comparable sales rose by 12.1% YoY, with digital channel sales growing 7.9% and accounting for over 60% of total sales in the quarter [3].

Arcos Dorados' digital channels have significantly contributed to its sales growth, with members of its loyalty program representing almost 23% of total sales in six available markets [3]. The company opened 20 new 'Experience of the Future' restaurants in the second quarter, with plans to open 90 to 100 by the end of the year, further enhancing customer engagement and sales growth [3]. Additionally, Arcos Dorados received an upgrade to investment grade from Fitch and an initial rating of minus from S&P, indicating strong financial health [3].

However, the company faced challenges such as a challenging macroeconomic environment with uncertainty and weakening consumer confidence across several markets, higher beef prices in Brazil impacting margins, and a depreciation of the Mexican peso affecting US dollar revenue growth [3]. Despite these challenges, Arcos Dorados has managed to deliver positive comparable sales by offsetting a drop in traffic with targeted price increases and product mix [3].

Arcos Dorados Holdings' Q2 earnings report highlights the company's ability to navigate challenging macroeconomic conditions and drive growth through digital channels and market expansion. The company's strong financial health and strategic initiatives position it well for future growth opportunities in Latin America and the Caribbean.

References:
[1] https://seekingalpha.com/news/4483970-arcos-dorados-holdings-inc-q2-2025-earnings-preview
[2] https://global.morningstar.com/en-nd/stocks/mcdonalds-earnings-shares-rally-comparable-sales-recover-amid-focus-value-innovation
[3] https://ca.investing.com/news/company-news/arcos-dorados-holdings-inc-arco-q2-2025-earnings-call-highlights-strong-sales-growth-amidst--4157715