Arcos Dorados Holdings Inc. ARCO reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top line increased year over year, while the bottom line fell from the prior-year quarter’s figure.

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ARCO’s Q3 Earnings & Revenue Discussion

During the third quarter, the company reported adjusted earnings per share (EPS) of 17 cents, beating the Zacks Consensus Estimate of 16 cents. The bottom line fell 39.3% year over year from 28 cents reported in the year-ago quarter.

During the quarter, the company reported revenues of $1.13 billion, beating the consensus mark of $1.09 billion. The top line increased 0.8% on a year-over-year basis.

Arcos Dorados Holdings Inc. Price, Consensus and EPS Surprise

Arcos Dorados Holdings Inc. price-consensus-eps-surprise-chart | Arcos Dorados Holdings Inc. Quote

Digital channel sales during the quarter rose 16% year over year and represented 58% of systemwide sales. The growth was driven by strong performances in the Mobile App and Delivery services, along with continued expansion of the Loyalty Program.

During the third quarter, comparable restaurant sales increased 32.1% year over year, courtesy of strong guest volume growth.

Operating Highlights

During the third quarter, operating income amounted to $79.8 million compared with $91.1 million reported in the prior-year quarter.

During the quarter, food and paper costs came in at $381.2 million compared with $376 million reported in the prior-year quarter. General and administrative expenses in the first quarter came in at $68.1 million compared with $67.8 million in the prior-year period.

Adjusted EBITDA in the third quarter came in at $125 million compared with $129.1 million reported in the prior-year quarter.

ARCO’s Balance Sheet

Total cash and cash equivalents as of Sept. 30, 2024, totaled $115.9 million compared with $196.7 million on Dec. 31, 2023.

Net debt (total financial debt minus total cash and cash equivalents) as of Sept. 30, 2024, was $598.3 million, up from $481.3 million at 2023 end.

Store Developments

During the third quarter, the company opened 19 Experience of the Future (EOTF) restaurants, all free-standing units. The Brazil division opened 11 EOTF restaurants.

ARCO’s Zacks Rank

Arcos Dorados currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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