Arcos Dorados Reports First Quarter 2026 Financial Results

Total revenue reached $1.2 billion in the first quarter, up 12.9% in US dollars versus the prior year. Systemwide comparable sales rose 16.0% in the first quarter of 2026, supporting strong market share performance across the business. Consolidated Adjusted EBITDA1 in the first quarter was $118.0 million, up 29.3% versus the prior year period and the Company’s highest result for a first quarter. Consolidated Adjusted EBITDA margin expanded 120 basis points year-over-year to 9.7%. Consolidated Food & Paper costs as a percentage of revenue improved by about 60 basis points versus the prior year, led by a strong improvement in Brazil. Net Income was $36.1 million in the quarter, or $0.17 per share, up from $0.07 per share last year. Consolidated Net Income margin expanded 170 basis points year-over-year to 3.0%. Adjusted Free Cash Flow1 over the last twelve months reached $109.2 million, a significant improvement from $(3.1) million in the prior comparable period. The Company opened 19 restaurants across the region in the quarter. MONTEVIDEO, Uruguay--(BUSINESS WIRE)--Arcos Dorados Holdings Inc. (NYSE: ARCO) (“Arcos Dorados” or the “Company”), Latin America and the Caribbean’s largest restaurant chain and the world’s largest independent McDonald’s franchisee, today reported unaudited results for the three months ended March 31, 2026. Message from Luis Raganato, Chief Executive Officer Arcos Dorados has consistently added to its leading market share position and strengthened the McDonald’s Brand across our operating footprint over the last several years. In fact, taking 2019 as the base, through the end of 2025: total revenue grew almost 60%, Adjusted EBITDA nearly doubled and net income was up more than 2.5x, in US dollars. Our objective for the coming years is to build on this incredible foundation and continue to capitalize on the significant competitive advantages we built over the period. With that context, 2026 is off to a good start. First quarter 2026 highlights included $1.2 billion in total revenue, the Company’s highest level for a first quarter, which was supported by 16% systemwide comparable sales growth. Increased guest volume in NOLAD and SLAD added to higher average checks in Brazil and SLAD to drive growth in the period. Similar to total revenue, we generated our highest Adjusted EBITDA for a first quarter, reaching $118 million thanks to strong topline growth and very solid margin expansion, especially in Brazil and SLAD. We are pursuing strategies that capitalize on the Brand to monetize the significant market share advantage we hold in the region. Marketing campaigns focused on offering value platforms that appeal to lower income consumers and core menu items that drive Brand love as well as licenses and partnerships that keep McDonald’s culturally relevant. The Brand experience continued to expand beyond our restaurants, bolstered by the region’s most extensive digital platform and Loyalty Program. During the quarter, we added 19 new restaurants to our footprint and are already seeing opening costs per unit coming down thanks to more efficient capital deployment. Finally, 75% of our restaurants now offer guests the most modern experience available in the region’s quick service restaurant industry. 1 For definitions, please refer to pages 7 and 8 of this document. AD Holdings Inc. – Consolidated Key Financial Results Figure 1.(In millions of U.S. dollars, except as noted) 1Q25(a) Currency Translation(b) ConstantCurrencyGrowth (c) 1Q26(a+b+c) % AsReported % ConstantCurrency Total Restaurants (Units) 2,439 2,536 Sales by Company-operated Restaurants 1,027.5 (67.3) 200.2 1,160.4 12.9% 19.5% Revenues from franchised Restaurants 49.1 (3.7) 10.2 55.5 13.2% 20.8% Total Revenues 1,076.6 (71.0) 210.4 1,216.0 12.9% 19.5% Systemwide Comparable Sales 16.0% Adjusted EBITDA 91.3 (4.3) 31.0 118.0 29.3% 34.0% Adjusted EBITDA Margin 8.5% 9.7%1.2 p.p. Net income attributable to AD 13.9 5.9 16.3 36.1 159.4% 117.1% Net income attributable to AD Margin 1.3% 3.0%1.7 p.p. No. of shares outstanding (thousands) 210,663 210,663 EPS (US$/Share) 0.07 0.17 Arcos Dorados’ total revenues reached $1.2 billion, up 12.9% in US dollars versus the prior year quarter. The Company’s systemwide comparable sales rose 16.0% in the quarter, underpinned by positive guest traffic trends in SLAD and NOLAD, together with average check growth in Brazil and SLAD. Digital channel sales rose about 21% in the period and represented 64% of the first quarter’s systemwide sales. Performance remained notably strong in Self-order kiosk, Delivery and Loyalty sales versus the prior year. Self-order kiosk sales growth was helped by the increasingly modernized restaurant base. Delivery sales were helped by new partnerships in Brazil and expanding penetration in NOLAD and SLAD, where a growing number of consumers are discovering the convenience and value of the service. The Company’s Loyalty Program is available in all main markets and grew to 30.4 million registered members as of the end of the quarter. Enrollment and engagement has grown consistently since the Program’s launch, leading to more personalized marketing capabilities and a notable increase in both usage and frequency among members. Marketing campaigns during the quarter spanned core menu, affordability, and partnerships. In Brazil, for example, initiatives included the introduction of Best Burger, limited time offers through Economéqui and the first promotions associated with the FIFA World Cup. In NOLAD, Mexico continued to leverage affordability platforms and localized menu offerings while Panama and Costa Rica captured early results from initiatives designed to rebalance average check and guest traffic growth in those markets. Menu innovation was a key growth driver in SLAD, with food news across the beef, chicken and dessert categories. All divisions benefited from popular licenses such as Friends and Super Mario Galaxy, appealing to both kids and adults. Finally, the Brand’s cultural relevance was reinforced in Brazil, Argentina, Chile, and Colombia through music, a key consumer passion point, at the local Lollapalooza and Estéreo Picnic festivals. Consolidated Adjusted EBITDA margin was 9.7%, up 120 basis points versus the prior year period, driven by lower Food & Paper costs and G&A expenses as a percentage of revenue as well as gains from restaurant transactions in NOLAD and SLAD. Food & Paper contributed 60 basis points to the consolidated margin gain, led by a significant improvement in Brazil as well as better results in SLAD. Net income margin attributable to the Company was 3.0%, or 170 basis points higher versus the first quarter of 2025. The year‑over‑year improvement was driven by a higher Adjusted EBITDA margin, along with favorable impacts on net interest expenses and other financing results, gain from derivative instruments and foreign currency exchange results. These positive effects more than offset higher income tax expense and depreciation. Arcos Dorados recorded earnings of $0.17 per share in the first quarter of 2026 compared to $0.07 per share in the prior year period. Total weighted average shares were 210,663,057 in both periods. Notable Items Included in Adjusted EBITDA: The result in the first quarter of 2026 included $5.8 million related to restaurant transactions with sub-franchisees in NOLAD and SLAD. Excluded from Adjusted EBITDA: The result in the first quarter of 2026 excludes $1.7 million related to the reorganization and optimization plan, which was implemented in the fourth quarter of 2025 and finalized in the first quarter of 2026. New Unit Development: Total and by Format1 Figure 2. Mar. 31,2026 Dec. 31,2025 Sep. 30,2025 Jun. 30,2025 Mar. 31,2025 Brazil 1,241 1,230 1,202 1,191 1,179 NOLAD 670 669 666 658 657 SLAD 625 621 611 608 603 TOTAL 2,536 2,520 2,479 2,457 2,439 1end of period, including company operated and franchised restaurants Figure 3. As ofMar.31, 2026 Store Format* Total Restaurants Ownership McCafes Dessert Centers FS IS MS & FC Company Operated Franchised Brazil 684 90 467 1,241 769 472 214 2,019 NOLAD 427 48 195 670 536 134 20 524 SLAD 286 124 215 625 518 107 248 740 TOTAL 1,397 262 877 2,536 1,823 713 482 3,283 * FS: Freestanding; IS: In-Store; MS: Mall Store; FC: Food Court. Arcos Dorados opened 19 restaurants in the first quarter of 2026, including 13 freestanding units. As of the end of March 2026, 75% of its systemwide restaurant portfolio offers the most modernized restaurant experience in the Latin American and Caribbean QSR industry. Consolidated Debt and Financial Ratios Figure 4.(In thousands of U.S. dollars, except ratios) March 31, December 31, 2026 2025 Total Cash & cash equivalents (i) 266,165 422,347 Total Financial Debt (ii) 975,106 1,101,739 Net Financial Debt (iii) 708,941 679,392 LTM Adjusted EBITDA 601,939 575,209 Total Financial Debt / LTM Adjusted EBITDA ratio 1.6 1.9 Net Financial Debt / LTM Adjusted EBITDA ratio 1.2 1.2 LTM Net income attributable to AD 234,327 212,116 Total Financial Debt / LTM Net income attributable to AD ratio 4.2 5.2 Net Financial Debt / LTM Net income attributable to AD ratio 3.0 3.2 (i) Total cash & cash equivalents includes short-term investment (ii)Total financial debt includes long-term debt, accrued interest payable and derivative instruments (including the asset portion of derivatives amounting to $70.4 million and $78.7 million as a reduction of financial debt as of March 31, 2026 and December 31, 2025, respectively). (iii) Net financial debt equals total financial debt less total cash & cash equivalents. In March, the Company completed the liability management transaction it began implementing during the fourth quarter of 2025. The resulting net leverage ratio at the end of the first quarter of 2026 was unchanged compared with year-end 2025. Adjusted Free Cash Flow For the last twelve months ended March 31, 2026, the Company generated Adjusted Free Cash Flow of $109.2 million, compared to $(3.1) million in the prior comparable period. Recent Developments 2026 Annual General Shareholders Meeting The Company held its Annual General Shareholders’ Meeting in Montevideo, Uruguay on April 10, 2026. At the meeting, all the proposals were approved by the required majority of shareholders. 2029 Senior Notes – the Sustainability-Linked Bond The Company achieved its Sustainability Performance Targets related to greenhouse gas (GHG) emissions as defined in the Framework of its 2029 Senior Notes. Based on its audited 2025 metrics, Arcos Dorados reduced its absolute Scope 1 and Scope 2 GHG emissions by 26.5% versus the 2021 baseline (Sustainability Performance Target 1: 15% reduction). Additionally, the Company reduced the intensity of its Scope 3 GHG emissions by 16.1% versus the 2021 baseline (Sustainability Performance Target 2: 10% reduction). 2025 Social Impact and Sustainable Development Report In the coming weeks, Arcos Dorados will publish its 2025 Social Impact and Sustainable Development Report. The report will include information audited by EY and will provide an update on the progress related to initiatives and the implementation of the six pillars of the Company’s “Recipe for the Future” platform, as well as detailed information and key initiatives supporting the results of the Sustainability-Linked Bond target achievement. The full report will be available for download at www.recipeforthefuture.com. 2026 Arcos Dorados Investor Day The Company is planning to hold an Investor Day on the morning of October 1, 2026, in New York City. More information on registration and in-person participation in the event will be made available in the coming weeks. First Quarter 2026 Earnings Webcast A webcast to discuss the information contained in this press release will be held today, May 20, 2026, at 10:00 a.m. ET. In order to access the webcast, members of the investment community should follow this link: Arcos Dorados First Quarter 2026 Earnings Webcast. A replay of the webcast will be available later today in the investor section of the Company’s website: https://ir.arcosdorados.com/. Definitions In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), management analyzes business trends using a variety of performance, financial and liquidity measures, which are considered non-GAAP. This press release and the accompanying tables use the following non-GAAP measures: Adjusted EBITDA, Adjusted net cash provided by operating activities, Adjusted Free Cash Flow, Constant Currency basis, Systemwide sales, and Systemwide comparable sales growth. Adjusted EBITDA: Management uses Adjusted EBITDA to facilitate operating performance comparisons from period to period. Adjusted EBITDA is defined as the Company’s operating income plus depreciation and amortization plus/minus the following losses/gains: gains from sale or insurance recovery of property and equipment, write-offs of long-lived assets, impairment of long-lived assets, and reorganization and optimization plan expenses. Management believes Adjusted EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations such as capital structures (affecting net interest expense and other financing results), taxation (affecting income tax expense) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. Figure 5 of this earnings release includes a reconciliation of Adjusted EBITDA to Net income attributable to Arcos Dorados. For more information, please see the Adjusted EBITDA reconciliation in Note 8 – Segment and geographic information – of our financial statements filed today with the Securities and Exchange Commission (the “SEC”) on Form 6-K. Adjusted net cash provided by operating activities and Adjusted Free Cash Flow: Management uses Adjusted net cash provided by operating activities and Adjusted Free Cash Flow as supplemental measure to facilitate the analysis of the Company’s cash generation performance and liquidity from period to period. Adjusted net cash provided by operating activities is defined as net cash provided by (used in) operating activities plus interest paid less interest collected. Adjusted Free Cash Flow is defined as Adjusted net cash provided by operating activities less property and equipment expenditures, and purchases of restaurant businesses paid at acquisition date plus proceeds from sales of property and equipment, restaurant businesses and related advances. Management believes Adjusted net cash provided by operating activities and Adjusted Free Cash Flow provide useful information to investors, when considered together with GAAP measures, in evaluating the Company’s ability to generate cash to fund capital expenditures and financing activities. Management evaluates these measures prior to investing and financing decisions. Adjusted net cash provided by operating activities and Adjusted Free Cash Flow are non-GAAP financial measures and should not be considered as an alternative to net cash provided by operating activities or any other measure of financial performance or liquidity prepared in accordance with GAAP. These non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable to similarly titled measures used by other companies. A reconciliation of Adjusted Free Cash Flow to net cash provided by operating activities is included in Figure 11 of this earnings release. Constant Currency basis: refers to amounts calculated using the same exchange rate over the periods under comparison to remove the effects of currency fluctuations from this trend analysis. To better discern underlying business trends, this release uses non-GAAP financial measures that segregate year-over-year growth into two categories: Currency translation reflects the impact on growth of the appreciation or depreciation of the local currencies in which the Company conducts its business against the US dollar (the currency in which the Company’s financial statements are prepared). Constant currency growth reflects the underlying growth of the business excluding the effect from currency translation. The Company also calculates variations as a percentage in constant currency, which are also considered to be non-GAAP measures, to provide a more meaningful analysis of its business by identifying the underlying business trends, without distortion from the effect of foreign currency fluctuations. Systemwide sales: Systemwide sales represent measures for both Company-operated and sub-franchised restaurants. While sales by sub-franchisees are not recorded as revenues by the Company, management believes the information is important in understanding its financial performance because these sales are the basis on which it calculates and records sub-franchised restaurant revenues and are indicative of the financial health of its sub-franchisee base. Systemwide comparable sales growth: this non-GAAP measure, refers to the change, on a constant currency basis, in Company-operated and sub-franchised restaurant sales in one period from a comparable period for restaurants that have been open for thirteen months or longer (year-over-year basis) including those temporarily closed. Management believes it is a key performance indicator used within the retail industry and is indicative of the success of the Company’s initiatives as well as local economic, competitive and consumer trends. Sales by sub-franchisees are not recorded as revenues by the Company. About Arcos Dorados Arcos Dorados is the world’s largest independent McDonald’s franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 21 Latin American and Caribbean countries and territories with more than 2,500 restaurants, operated by the Company or by its sub-franchisees, that together employ more than 100 thousand people (as of 03/31/2026). The Company is also committed to the development of the communities in which it operates, to providing young people their first formal job opportunities and to utilize its Recipe for the Future to achieve a positive environmental impact. Arcos Dorados is listed for trading on the New York Stock Exchange (NYSE: ARCO). To learn more about the Company, please visit the Investors section of our website: https://ir.arcosdorados.com/. Cautionary Statement on Forward-Looking Statements This press release contains forward-looking statements. The forward-looking statements contained herein include statements about the Company’s business prospects, its ability to attract customers, its expectation for revenue generation and its outlook and guidance for 2026. These statements are subject to the general risks inherent in Arcos Dorados' business. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados' business and operations involve numerous risks and uncertainties, many of which are beyond the control of Arcos Dorados, which could result in Arcos Dorados' expectations not being realized or otherwise materially affect the financial condition, results of operations and cash flows of Arcos Dorados. Additional information relating to the uncertainties affecting Arcos Dorados' business is contained in its filings with the Securities and Exchange Commission. The forward-looking statements are made only as of the date hereof, and Arcos Dorados does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. Certain trademarks and characters referenced herein are the property of their respective owners and are used under license. First Quarter 2026 Consolidated Results Figure 5.(In thousands of U.S. dollars, except per share data) For Three-Months ended March 31, 2026 2025 REVENUES Sales by Company-operated restaurants 1,160,416 1,027,531 Revenues from franchised restaurants 55,547 49,061 Total Revenues 1,215,963 1,076,592 OPERATING COSTS AND EXPENSES Company-operated restaurant expenses: Food and paper (406,999) (366,612) Payroll and employee benefits (226,349) (197,749) Occupancy and other operating expenses (353,877) (308,065) Royalty fees (70,855) (63,411) Franchised restaurants - occupancy expenses (24,257) (21,044) General and administrative expenses (76,749) (73,325) Other operating income (expense), net 5,887 (1,239) Total operating costs and expenses (1,153,199) (1,031,445) Operating income 62,764 45,147 Net interest expense and other financing results (14,258) (16,592) Gain from derivative instruments 4,369 110 Foreign currency exchange results 7,187 (1,961) Other non-operating expenses, net (16) (122) Income before income taxes 60,046 26,582 Income tax expense, net (23,815) (12,505) Net income 36,231 14,077 Net income attributable to non-controlling interests (90) (147) Net income attributable to Arcos Dorados Holdings Inc. 36,141 13,930 Net income attributable to Arcos Dorados Holdings Inc. Margin as % of total revenues 3.0% 1.3% Earnings per share information ($ per share): Basic net income per common share $ 0.17 $ 0.07 Weighted-average number of common shares outstanding-Basic 210,663,057 210,663,057 Adjusted EBITDA Reconciliation Net income attributable to Arcos Dorados Holdings Inc. 36,141 13,930 Net income attributable to non-controlling interests 90 147 Income tax expense, net 23,815 12,505 Other non-operating expenses, net 16 122 Foreign currency exchange results (7,187) 1,961 Gain from derivative instruments (4,369) (110) Net interest expense and other financing results 14,258 16,592 Depreciation and amortization 54,261 46,295 Operating charges excluded from EBITDA computation 984 (163) Adjusted EBITDA 118,009 91,279 Adjusted EBITDA Margin as % of total revenues 9.7% 8.5% First Quarter 2026 Results by Division and Average Exchange Rates per Quarter Figure 6.(In thousands of U.S. dollars) For Three-Months ended as Constant March 31, reported Currency 2026 2025 Incr/(Decr)% Incr/(Decr)% Revenues Brazil 471,495 400,302 17.8% 5.8% NOLAD 322,553 281,700 14.5% 6.2% SLAD 421,915 394,590 6.9% 43.0% TOTAL 1,215,963 1,076,592 12.9% 19.5% Operating Income (loss) Brazil 38,310 32,978 16.2% 4.3% NOLAD 15,160 12,859 17.9% 10.5% SLAD 34,097 25,069 36.0% 86.8% Corporate and Other (24,803) (25,759) 3.7% -8.2% TOTAL 62,764 45,147 39.0% 49.6% Adjusted EBITDA Brazil 59,944 49,569 20.9% 8.6% NOLAD 31,702 26,240 20.8% 12.1% SLAD 49,403 39,060 26.5% 65.6% Corporate and Other (23,040) (23,590) 2.3% -8.5% TOTAL 118,009 91,279 29.3% 34.0% Figure 7. Systemwide Comparable Sales Growth For Three-Months ended March 31, 2026 2025 Brazil 0.5% 2.9% NOLAD 1.6% -1.6% SLAD 47.7% 38.7% TOTAL 16.0% 11.1% Figure 8. Period averageLocal currency per US$ Brazil Mexico Argentina 1Q26 5.26 17.57 1,418 1Q25 5.86 20.43 1,055 Summarized Consolidated Balance Sheet Figure 9.(In thousands of U.S. dollars) March 31, December 31, 2026 2025 ASSETS Current assets Cash and cash equivalents 255,630 373,438 Short-term investments 10,535 48,909 Accounts and notes receivable, net 159,676 164,482 Other current assets (1) 256,688 254,764 Derivative instruments 11,544 10,365 Total current assets 694,073 851,958 Non-current assets Property and equipment, net 1,322,688 1,308,732 Net intangible assets and goodwill 158,649 148,950 Deferred income taxes 114,077 104,250 Derivative instruments 58,829 68,339 Equity method investments 15,913 16,033 Leases right of use asset 1,185,573 1,133,551 Other non-current assets (2) 268,915 254,031 Total non-current assets 3,124,644 3,033,886 Total assets 3,818,717 3,885,844 LIABILITIES AND EQUITY Current liabilities Accounts payable 327,587 356,606 Taxes payable (3) 123,717 143,922 Accrued payroll and other liabilities 204,399 145,460 Royalties payable to McDonald’s Corporation 30,120 34,099 Provision for contingencies 1,457 1,455 Interest payable 14,566 18,915 Financial debt (4) 53,134 21,442 Operating lease liabilities 109,475 106,836 Total current liabilities 864,455 828,735 Non-current liabilities Accrued payroll and other liabilities 95,307 91,801 Provision for contingencies 55,521 49,399 Financial debt (5) 977,779 1,140,086 Deferred income taxes 2,888 2,757 Operating lease liabilities 1,045,624 1,000,927 Total non-current liabilities 2,177,119 2,284,970 Total liabilities 3,041,574 3,113,705 Equity Class A shares of common stock 389,967 389,967 Class B shares of common stock 132,915 132,915 Additional paid-in capital 8,659 8,659 Retained earnings 803,101 825,946 Accumulated other comprehensive loss (539,845) (567,630) Common stock in treasury (19,367) (19,367) Total Arcos Dorados Holdings Inc shareholders’ equity 775,430 770,490 Non-controlling interest in subsidiaries 1,713 1,649 Total equity 777,143 772,139 Total liabilities and equity 3,818,717 3,885,844 (1) Includes "Other receivables", "Inventories" and "Prepaid expenses and other current assets". (2) Includes "Miscellaneous" and "Collateral deposits". (3) Includes "Income taxes payable" and "Other taxes payable". (4) Includes "Short-term debt”, “Current portion of long-term debt" and "Derivative instruments”. (5) Includes "Long-term debt, excluding current portion" and "Derivative instruments". Contacts Investor Relations ContactDan Schleiniger VP of Investor Relations Arcos Dorados daniel.schleiniger@mcd.com.uy Media ContactDavid Grinberg VP of Corporate Communications Arcos Dorados david.grinberg@mcd.com.uy Follow us on: LinkedInInstagramXYouTube Read full story here

Arcos Dorados Reports First Quarter 2026 Financial Results

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