Arcos Dorados (ARCO) Q3 Earnings & Revenues Top Estimates
Arcos Dorados Holdings Inc. ARCO reported third-quarter fiscal 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis. Following the results, the company’s shares jumped 8.5% on Nov 16.
Delving Deeper
ARCO reported adjusted earnings per share (EPS) of 30 cents in the third quarter, beating the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, it reported adjusted EPS of 23 cents.
It reported quarterly revenues of $1,11.5 million, beating the consensus mark of $1,076 million. Moreover, the top line increased 21.7% on a year-over-year basis. The company benefited from robust performance in markets like Brazil, Chile, Costa Rica and Mexico.
During the quarter, counter sales (including self-order kiosks) and delivery sales grew 41% and 48% year over year, respectively, on a constant-currency basis. Digital channel sales contributed 50% to systemwide sales, reaching $731.5 million. Systemwide comparable sales improved 37.3% year over year.
Arcos Dorados Holdings Inc. Price, Consensus and EPS Surprise
Arcos Dorados Holdings Inc. price-consensus-eps-surprise-chart | Arcos Dorados Holdings Inc. Quote
Operating Highlights
During the third quarter, operating income amounted to $91.1 million compared with $73.9 million reported in the prior-year quarter.
Food and paper costs came in at $376 million compared with $316.4 million reported in the prior-year quarter. General and administrative expenses were $67.8 million compared with $58.6 million in the prior-year period.
Adjusted EBITDA reached $129.1 million compared with $102.6 million in the prior-year quarter.
Balance Sheet
Cash and cash equivalents as of Sep 30, 2023, totaled $166.3 million compared with $266.9 million on Dec 31, 2022.
Total financial debt as of Sep 30, 2023, was $709.3 million compared with $674.4 million as of Dec 31, 2022.
Store Developments
During the quarter under review, ARCO opened 27 restaurants. The company continues to anticipate opening 75 to 80 new restaurants in 2023.
Zacks Rank
Arcos Dorados currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Retail-Wholesale Releases
YUM! Brands, Inc. YUM reported mixed third-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
YUM! Brands’ third-quarter 2023 adjusted EPS reached $1.44, increasing 32% from the prior year. Quarterly revenues of $1,708 million improved 4% year over year. YUM benefited from robust same-store sales and unit growth.
McDonald's Corporation MCD reported third-quarter 2023 results, with earnings and revenues outpacing the Zacks Consensus Estimate. Both metrics surpassed the consensus estimate for the fifth straight quarter and rose on a year-over-year basis.
In the quarter under discussion, global comps of McDonald's expanded 8.8% compared with 11.7% in the prior-year quarter.
Yum China Holdings, Inc. YUMC reported third-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate after beating in the preceding two quarters. Consumer demand weakened in late September through October, negatively impacting its quarterly results.
Total system sales of Yum China grew 15% year over year. System sales at KFC and Pizza Hut jumped 15% and 13% (excluding foreign currency translation), respectively.
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