Arcos Dorados (NYSE:ARCO) Posts Earnings Results, Beats Expectations By $0.07 EPS

Posted by Geri Gentry on Aug 15th, 2026

Arcos Dorados (NYSE:ARCO – Get Free Report) issued its earnings results on Thursday. The restaurant operator reported $0.22 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.15 by $0.07, FiscalAI reports. The business had revenue of $1.31 billion for the quarter, compared to analyst estimates of $1.28 billion. Arcos Dorados had a net margin of 5.15% and a return on equity of 12.77%.

Here are the key takeaways from Arcos Dorados’ conference call:

Record quarterly performance: Revenue reached $1.3 billion, up more than 14% year over year in constant currencies, while adjusted EBITDA rose over 20% to $126.8 million and net income and EPS reached record second-quarter levels.
Digital and brand engagement strengthened: Digital sales increased more than 25% and represented approximately 66% of total sales, identified sales exceeded 28%, and guest-traffic market share gained roughly 0.5 percentage points across the region.
Brazil rebounded materially: Value offerings, targeted digital promotions, and FIFA World Cup marketing drove positive traffic and comparable-sales momentum, while lower food and paper costs, operating leverage, and G&A savings expanded Brazil’s EBITDA margin by 180 basis points to 14.6%.
Consumer conditions remain challenging in several markets: NOLAD faced a difficult comparison base and pressured spending, while SLAD margins were broadly flat and Argentina experienced continued consumer weakness and food-and-paper cost pressure.
Financial flexibility and growth investment remain strong: Net leverage improved to 1.1 times, the company fully repaid its 2029 senior notes, opened 35 restaurants in the first half, and reduced average new-store capital costs by approximately 15%–20% while continuing portfolio modernization.

Arcos Dorados Stock Performance

Shares of ARCO stock traded down $0.24 during mid-day trading on Friday, reaching $7.89. The stock had a trading volume of 1,622,318 shares, compared to its average volume of 1,073,606. The firm’s 50 day simple moving average is $8.28 and its 200 day simple moving average is $8.41. The company has a quick ratio of 0.73, a current ratio of 0.80 and a debt-to-equity ratio of 1.25. Arcos Dorados has a one year low of $6.54 and a one year high of $9.75. The firm has a market cap of $1.66 billion, a PE ratio of 6.47 and a beta of 0.48.

Hedge Funds Weigh In On Arcos Dorados

Hedge funds and other institutional investors have recently made changes to their positions in the business. Lazard Asset Management LLC grew its stake in shares of Arcos Dorados by 6.7% in the 4th quarter. Lazard Asset Management LLC now owns 21,471,672 shares of the restaurant operator’s stock valued at $157,602,000 after purchasing an additional 1,343,195 shares during the period. SPX Gestao de Recursos Ltda boosted its holdings in shares of Arcos Dorados by 19.1% in the 4th quarter. SPX Gestao de Recursos Ltda now owns 7,551,676 shares of the restaurant operator’s stock worth $55,429,000 after acquiring an additional 1,209,055 shares in the last quarter. Moerus Capital Management LLC boosted its stake in Arcos Dorados by 6.8% in the fourth quarter. Moerus Capital Management LLC now owns 3,556,906 shares of the restaurant operator’s stock worth $26,108,000 after purchasing an additional 226,912 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its holdings in shares of Arcos Dorados by 3.1% during the second quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 3,508,707 shares of the restaurant operator’s stock worth $27,684,000 after purchasing an additional 105,972 shares during the last quarter. Finally, Goldman Sachs Group Inc. raised its holdings in shares of Arcos Dorados by 83.1% in the fourth quarter. Goldman Sachs Group Inc. now owns 1,127,060 shares of the restaurant operator’s stock valued at $8,273,000 after buying an additional 511,468 shares during the last quarter. 55.91% of the stock is owned by institutional investors.

Arcos Dorados News Summary

Here are the key news stories impacting Arcos Dorados this week:

Positive Sentiment: Quarterly earnings and revenue exceeded expectations. Arcos Dorados reported adjusted earnings of $0.22 per share, up from $0.11 a year earlier and ahead of the $0.15 analyst consensus. Revenue reached a record $1.31 billion, surpassing the $1.28 billion estimate. Arcos Dorados Surpasses Q2 Earnings and Revenue Estimates
Positive Sentiment: Digital and loyalty initiatives supported sales momentum. Coverage highlighted record sales associated with the company’s digital channels and loyalty program, reinforcing management’s strategy to increase customer engagement and transaction frequency. The Bull Case for Arcos Dorados Following Record Digital and Loyalty-Driven Sales
Positive Sentiment: Management’s earnings-call presentation emphasized operating progress. The results materials and conference call provided investors with additional detail on the quarter’s sales performance, profitability and growth priorities, helping support the bullish case following the results release. Arcos Dorados Q2 2026 Earnings Call Summary
Neutral Sentiment: The earnings beat improves near-term sentiment, but investors will look for evidence that digital growth, loyalty adoption and revenue momentum can persist across Arcos Dorados’ Latin American markets. Arcos Dorados Q2 2026 Earnings Call Transcript
Negative Sentiment: Despite the strong results and an initial rally, ARCO’s subsequent weakness suggests profit-taking and/or investor concern about valuation, margins, leverage or the sustainability of growth. The company’s reported net margin remained modest, while its debt-to-equity ratio was 1.25.

Analysts Set New Price Targets

A number of analysts recently weighed in on ARCO shares. Weiss Ratings cut shares of Arcos Dorados from a “hold (c+)” rating to a “hold (c)” rating in a report on Monday, June 29th. Zacks Research cut shares of Arcos Dorados from a “strong-buy” rating to a “hold” rating in a report on Monday, August 10th. Santander raised Arcos Dorados to an “outperform” rating in a research report on Monday, April 20th. JPMorgan Chase & Co. upgraded Arcos Dorados from a “neutral” rating to an “overweight” rating and lifted their price target for the company from $9.00 to $10.50 in a report on Friday, July 17th. Finally, Wall Street Zen upgraded shares of Arcos Dorados from a “hold” rating to a “buy” rating in a research note on Saturday, May 23rd. Three research analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $10.50.

Get Our Latest Report on ARCO

Arcos Dorados Company Profile

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Arcos Dorados Holdings Inc is the largest independent McDonald’s franchisee in the world, operating under an exclusive license agreement with McDonald’s Corporation. The company develops, owns and operates quick-service restaurants, offering the full McDonald’s menu, including hamburgers, chicken sandwiches, salads, sides, desserts and McCafé beverages. In addition to restaurant operations, Arcos Dorados manages supply chain logistics, property development, training and support services for its franchise network.

Headquartered in Montevideo, Uruguay, Arcos Dorados serves 20 markets across Latin America and the Caribbean, including Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico and Uruguay.