- Systemwide comparable sales¹ grew 37.6% year-over-year,
supported by higher guest volume across all divisions
- Total revenue totaled $990.8 million in the first quarter,
rising 25.3% year-over-year
- Digital channels (Delivery, Mobile App and Self-order
Kiosks) continued to drive topline performance, representing about
47% of systemwide sales in the first quarter
- Consolidated Adjusted EBITDA¹ in US dollars was $100.5
million, up 28.0% versus the prior year
- Net Income was $37.4 million in the quarter, or $0.18 per
share, compared to $0.12 per share in the prior year
quarter
Arcos Dorados Holdings, Inc. (NYSE: ARCO) (“Arcos Dorados” or
the “Company”), Latin America’s largest restaurant chain and the
world’s largest independent McDonald’s franchisee, today reported
unaudited results for the three months ended March 31, 2023.
First Quarter 2023 Highlights
- Systemwide comparable sales¹ increased 37.6%, with strong sales
growth in all divisions.
- Consolidated revenues reached $990.8 million, growing 25.3% in
US dollars, or 43.9% in constant currency, versus the prior year
period.
- Consolidated Adjusted EBITDA¹ of $100.5 million rose 28.0%, or
42.7% in constant currency, versus the prior year quarter.
- Consolidated Adjusted EBITDA margin reached 10.1% in the
quarter, expanding by 20 basis points, with solid margin
performance in Brazil and SLAD compared to the prior year
period.
- Net income was $37.4 million, up 52.7% versus the first quarter
of 2022.
- Basic net income per share was $0.18 in the quarter, versus
$0.12 per share in the first quarter of 2022.
- Net Debt to Adjusted EBITDA leverage ratio remained at a
healthy 1.0x at the end of the first quarter 2023.
¹ For definitions, please refer to page 16 of this document.
Message from Marcelo Rabach, Chief Executive Officer
Arcos Dorados, like the McDonald’s system globally, has been
generating consistently strong results for the last couple of
years. This is a direct result of our long-term, strategic approach
to generating value for our shareholders and we expect the
structural competitive advantages of our restaurant portfolio and
digital platform to continue to drive value creation for the
foreseeable future.
Our guests have left no doubt we are operating the most beloved
brand in the QSR industry in Latin America and the Caribbean. They
recognize the value we offer in our restaurants on a daily basis
and the positive impact we make in our communities every year. This
is why restaurant volumes continue to grow and brand trust metrics
are at all-time highs.
Each restaurant opening brings McDonald’s favorite menu items
closer to our guests while also creating new job opportunities for
young people and investing in the economic development of local
communities. Latin America and the Caribbean is a widely
underpenetrated region for the quick service restaurant industry,
which represents a significant growth opportunity for Arcos
Dorados. Against that backdrop, we are working to support a
sustainable future for our business and the communities where we
operate as we capture the vast potential that lies in front of
us.
We have certainly strengthened the Brand through our marketing
and communications campaigns. But true brand strength comes from
the experience we deliver to more than four million guests every
day in a modernized restaurant portfolio and with a “Coolture” of
Service mentality. The Three D’s strategy provides guests the
opportunity to choose the experience that best fits their
individual needs and the value we are offering today makes the
Brand more accessible than ever.
To sustain the business model and brand trust, we must operate
responsibly. This is why we have the industry’s leading
environmental, social and governance platform. Our Recipe for the
Future includes ambitious initiatives and goals, designed to
benefit the business, the communities we serve and the planet we
all share.
Thank you for your ongoing support.
Consolidated Results
Figure 1. AD Holdings Inc Consolidated: Key Financial
Results(In millions of U.S. dollars, except as noted)
1Q22(a) CurrencyTranslation(b)
ConstantCurrencyGrowth(c) 1Q23(a+b+c) %
AsReported % ConstantCurrency Total Restaurants
(Units)
2,273
2,312
Sales by Company-operated Restaurants
755.3
(142.2)
333.3
946.4
25.3%
44.1%
Revenues from franchised restaurants
35.4
(4.4)
13.5
44.4
25.6%
38.1%
Total Revenues
790.7
(146.7)
346.8
990.8
25.3%
43.9%
Systemwide Comparable Sales
37.6%
Adjusted EBITDA
78.5
(11.5)
33.5
100.5
28.0%
42.7%
Adjusted EBITDA Margin
9.9%
10.1%
0.2 p.p.
Net income (loss) attributable to AD
24.5
(9.9)
22.8
37.4
52.7%
93.2%
No. of shares outstanding (thousands)
210,478
210,595
EPS (US$/Share)
0.12
0.18
Arcos Dorados’ free-standing restaurant portfolio, which
provides structural competitive advantages in Drive-thru and
Delivery, together with recovering front counter sales volume and
increased Digital sales penetration, drove strong revenue growth in
the quarter. Systemwide comparable sales for the first quarter rose
37.6%, growing well above inflation in all divisions. Total
revenues in US dollars increased 25.3%, or 43.9% in constant
currency, versus the prior year period.
Front counter sales grew more than 50% in constant currency
versus the prior year and generated 59% of systemwide sales in the
first quarter of 2023. Drive-thru and Delivery sales increased 13%
and 40% in constant currency, respectively, despite the
acceleration in front counter sales. Total restaurant volumes
continued to grow as the Company’s omnichannel offerings drove
increased guest frequency.
The Company’s long-term strategy is designed to generate
sustainable revenue and adjusted EBITDA growth by offering the best
value, quality and experience in the industry. In line with this
strategy, Digital, which includes sales from Delivery, Mobile App
and Self-order kiosks, reached $598.9 million, or 47% of systemwide
sales in the first quarter.
As of the end of March 2023, the Mobile App had reached more
than 93 million cumulative downloads and more than 15 million
average monthly active users. During the quarter, identifiable
sales rose to 18% of consolidated sales and 23% of total sales in
Brazil, which has the highest penetration of Digital channels in
the Company’s footprint.
Arcos Dorados’ Customer Relationship Management platform also
continued to grow and reached more than 68 million unique
registered users by the end of March 2023. The platform provides
convenient solutions, combined with insights from the Company’s
data analytics capabilities, aiming to drive greater guest
frequency through a more personalized experience.
Adjusted EBITDA
1Q23 Adjusted EBITDA Bridge
($ million)
First quarter consolidated Adjusted EBITDA reached $100.5
million, up 28.0% versus the prior year quarter. The Adjusted
EBITDA margin of 10.1%, rose 20 basis points versus the prior year,
driven by solid margin expansion in Brazil and SLAD. All divisions
generated US dollar EBITDA growth versus the prior year
quarter.
Strong sales growth drove margin expansion with efficiencies in
payroll expenses and operating leverage in both occupancy &
other operating expenses as well as general and administrative
(G&A) expenses. These more than offset moderately higher food
& paper (F&P) costs as a percentage of revenue and the
impact of the final step up of the royalty rate, which became
effective as of August 3, 2022.
Notable items in the Adjusted EBITDA reconciliation
Included in Adjusted EBITDA: There
were no notable items included in Adjusted EBITDA in either the
first quarter of 2023 or the first quarter 2022.
Excluded from Adjusted EBITDA:
There were no notable items excluded from Adjusted EBITDA in either
the first quarter of 2023 or the first quarter 2022.
Non-operating Results
Arcos Dorados’ non-operating results for the first quarter
included a $2.4 million gain from non-cash foreign exchange and
derivative instruments.
Net interest expense and other financing results were stable
year-over-year. The Company recorded an income tax expense of $21.0
million in the first quarter, compared to an income tax expense of
$17.2 million in the prior-year period.
First quarter net income attributable to the Company totaled
$37.4 million, compared to net income of $24.5 million in the same
period of 2022. Arcos Dorados generated net income of $0.18 per
share in the first quarter 2023 compared to net income of $0.12 per
share in the prior year quarter. Total weighted average shares for
the first quarter of 2023 were 210,594,545 compared to 210,478,322
in the prior year’s quarter.
For reference:
Figure 2. AD Holdings Inc Consolidated - Excluding Venezuela:
Key Financial Results(In millions of U.S. dollars, except as
noted)
1Q22(a) CurrencyTranslation(b)
ConstantCurrencyGrowth(c) 1Q23(a+b+c) %
AsReported % ConstantCurrency Total Restaurants
(Units)
2,172
2,220
Sales by Company-operated Restaurants
752.3
(122.6)
311.8
941.5
25.2%
41.4%
Revenues from franchised restaurants
35.0
(2.5)
11.5
44.0
25.5%
32.7%
Total Revenues
787.3
(125.1)
323.3
985.5
25.2%
41.1%
Systemwide Comparable Sales
34.2%
Adjusted EBITDA
79.6
(12.5)
34.5
101.6
27.6%
43.3%
Adjusted EBITDA Margin
10.1%
10.3%
0.2 p.p.
Net income (loss) attributable to AD
25.9
(10.7)
22.9
38.0
47.1%
88.6%
No. of shares outstanding (thousands)
210,478
210,595
EPS (US$/Share)
0.12
0.18
Divisional Results
Brazil Division
Figure 3. Brazil Division: Key Financial Results(In millions
of U.S. dollars, except as noted)
1Q22(a)
CurrencyTranslation(b) ConstantCurrencyGrowth(c)
1Q23(a+b+c) % AsReported % ConstantCurrency
Total Restaurants (Units)
1,061
1,091
Total Revenues
312.0
2.3
59.9
374.2
19.9%
19.2%
Systemwide Comparable Sales
13.8%
Adjusted EBITDA
46.0
0.3
13.1
59.5
29.2%
28.5%
Adjusted EBITDA Margin
14.8%
15.9%
1.1 p.p.
Brazil’s revenues increased 19.9% in US dollars versus the first
quarter 2022, reaching $374.2 million, due to a strong traffic
increase in the period. Systemwide comparable sales rose 13.8%
versus the prior year, more than 2.6x inflation.
Digital sales in Brazil reached $322.7 million in the first
quarter, up 38% versus the prior year, and represented 57% of the
division’s systemwide sales in the period. Delivery sales rose 23%
in constant currency versus the prior year. Importantly, this
increase included both higher guest volume and average check,
demonstrating Delivery’s continued popularity among guests, even as
front counter sales accelerated in the period.
Results were positively impacted by strong marketing campaigns
and brand activations such as the Big Brother Brazil and
Lollapalooza sponsorships. The quarter also included new product
launches in the premium segment with Brabos, a new indulgent beef
burger, and McCrispy Chicken Legend, an extension of the McCrispy
Chicken platform that brought back the popular CBO sauce and
reinforced the Company’s chicken portfolio. Channel-specific
campaigns such as “Singing in Drive-Thru,” early access to new
products for App users, gamification in the App with “MequiHit” and
a McDelivery activation in Lollapalooza all contributed to strong
digital sales growth in the period.
As reported Adjusted EBITDA in the division reached $59.5
million in the quarter, rising 29.2% versus the prior year in US
dollars. Adjusted EBITDA margin rose 110 basis points in Brazil,
with efficiencies in payroll and operating leverage in both
occupancy and other operating expenses as well as G&A. These
more than offset moderately higher F&P costs as a percentage of
revenue and the impact of the final step-up in the Company’s
royalty rate.
North Latin American Division (NOLAD)
Figure 4. NOLAD Division: Key Financial Results(In millions
of U.S. dollars, except as noted)
1Q22(a)
CurrencyTranslation(b) ConstantCurrencyGrowth(c)
1Q23(a+b+c) % AsReported % ConstantCurrency
Total Restaurants (Units)
625
639
Total Revenues
203.9
11.8
43.6
259.3
27.2%
21.4%
Systemwide Comparable Sales
16.6%
Adjusted EBITDA
21.4
0.9
1.4
23.7
10.7%
6.3%
Adjusted EBITDA Margin
10.5%
9.1%
-1.4 p.p.
As reported revenues totaled $259.3 million, up 27.2% in US
dollars and 21.4% in constant currency versus the prior year
quarter. NOLAD’s systemwide comparable sales rose 16.6%
year-over-year, or 2.8x blended inflation in the period, with
particularly strong growth in Mexico and the French West Indies
markets, while Costa Rica, Panama and Puerto Rico also delivered
solid topline growth.
Marketing activities in NOLAD continued to build sales momentum.
Mexico and Costa Rica launched the “Big Mac Chicken,” which
leverages a core menu item to support sales in the chicken
platform. The Company also continued the roll out of Best Burger,
extending the platform to Panama and capitalizing on Costa Rica’s
best practices for implementation. Best Burger is a new quality
standard for McDonald’s classic burgers. It makes McDonald’s core
burgers even better with small changes that add up to a big
difference. Guests experience hotter, juicier, and tastier
hamburgers. Puerto Rico strengthened brand equity with the launch
of the “Bacon Ranch McCrispy Chicken”, adding to its chicken
platform, and the “McCriollo”, strengthening its leadership in the
breakfast day part with a locally relevant sandwich.
As reported Adjusted EBITDA in the division reached $23.7
million in the quarter, rising 10.7% versus the prior year in US
dollars. Adjusted EBITDA margin contracted primarily due to higher
F&P costs as a percentage of revenue as well as the impact of
the final step-up in the Company’s royalty rate. These were
partially offset by operating leverage in occupancy & other
operating expenses as well as G&A.
South Latin American Division (SLAD)
Figure 5. SLAD Division: Key Financial Results(In millions
of U.S. dollars, except as noted)
1Q22(a)
CurrencyTranslation(b) ConstantCurrencyGrowth(c)
1Q23(a+b+c) % AsReported % ConstantCurrency
Total Restaurants (Units)
587
582
Total Revenues
274.9
(160.7)
243.2
357.3
30.0%
88.5%
Systemwide Comparable Sales
91.8%
Adjusted EBITDA
30.3
(22.2)
32.6
40.7
34.3%
107.4%
Adjusted EBITDA Margin
11.0%
11.4%
0.4 p.p.
Revenues in SLAD increased 30.0% in US dollars, or 88.5% in
constant currency terms. Systemwide comparable sales rose 91.8%, or
1.5x the division’s blended inflation rate, supported by robust
volume growth in all markets.
During the quarter, the Company launched the “McCrispy Chicken”
platform in Argentina and Chile, improving the Brand’s quality and
taste perception, with strong consumer response in both markets.
The launch of the “Signature Turbo Tasty” platform in Chile
strengthened the market’s premium beef product offerings and
reinforced the Brand’s value for money perception. Finally, the
Company connected younger guests with the Brand by sponsoring
Lollapalooza in Argentina and Chile and Estereo Picnic in Colombia,
some of the most relevant music festivals in the region.
Adjusted EBITDA reached $40.7 million, compared with $30.3
million in the prior-year quarter, representing a year-over-year
increase of 34.3% in US dollars. Adjusted EBITDA margin in the
quarter benefitted from lower F&P costs as a percentage of
revenue and operating leverage in occupancy & other operating
expenses as well as G&A. These more than offset a moderate
increase in payroll expenses as a percentage of revenue and the
impact of the final step-up in the Company’s royalty rate.
For reference:
Figure 6. SLAD Division - Excluding Venezuela: Key Financial
Results(In millions of U.S. dollars, except as noted)
1Q22(a) CurrencyTranslation(b)
ConstantCurrencyGrowth(c) 1Q23(a+b+c) %
AsReported % ConstantCurrency Total Restaurants
(Units)
486
490
Total Revenues
271.5
(139.1)
219.7
352.0
29.7%
80.9%
Systemwide Comparable Sales
81.1%
Adjusted EBITDA
31.5
(23.1)
33.5
41.8
32.9%
106.4%
Adjusted EBITDA Margin
11.6%
11.9%
0.3 p.p.
New Unit Development
Figure 7. Total Restaurants (eop)* March2023
December2022 September2022 June2022
March2022 Brazil
1,091
1,084
1,077
1,070
1,061
NOLAD
639
638
631
628
625
SLAD
582
590
589
588
587
TOTAL
2,312
2,312
2,297
2,286
2,273
* Considers Company-operated and franchised restaurants at
period-end
Figure 8. Footprint as of March 31, 2023 Store
Type* TotalRestaurants Ownership McCafes
DessertCenters FS IS MS & FC
CompanyOperated Franchised Brazil
542
92
457
1,091
658
433
129
1,977
NOLAD
392
51
196
639
479
160
13
521
SLAD
232
128
222
582
496
86
164
700
TOTAL
1,166
271
875
2,312
1,633
679
306
3,198
* FS: Free-Standing; IS: In-Store; MS: Mall Store; FC: Food Court.
During the first quarter of 2023, Arcos Dorados opened 8
restaurants, all of them free-standing units, including 7
restaurants in Brazil. Free-standing restaurants, which represent a
structural competitive advantage due to their ability to adapt to
changing consumer trends and preferences, make up 50% of the
Company’s total restaurant portfolio.
The Company’s restaurant opening pipeline remains robust for the
remainder of 2023 and beyond. Restaurant openings and
modernizations in 2023 are expected to be more concentrated in the
second semester of the year.
As of the end of March 2023, Arcos Dorados was operating 1,072
Experience of the Future restaurants, the most modern format in the
global McDonald’s system, making up 46% of its total restaurant
footprint.
Balance Sheet & Cash Flow Highlights
Figure 9. Consolidated Financial Ratios(In thousands of U.S.
dollars, except ratios)
March 31, December 31,
2023
2022
Cash & cash equivalents (i)
263,829
304,396
Total Financial Debt (ii)
688,781
674,401
Net Financial Debt (iii)
424,952
370,005
Adjusted EBITDA
408,570
386,564
Total Financial Debt / LTM Adjusted EBITDA ratio
1.7
1.7
Net Financial Debt / LTM Adjusted EBITDA ratio
1.0
1.0
(i)
Cash & cash equivalents includes
Short-term investment
(ii)
Total Financial Debt includes short-term
debt, long-term debt, accrued interest payable and derivative
instruments (including the asset portion of derivatives amounting
to $88.2 million and $92.9 million as a reduction of financial debt
as of March 31, 2023 and December 2022, respectively).
(iii)
Net Financial Debt equals Total Financial
Debt less Cash & cash equivalents.
As of March 31, 2023, Cash and cash equivalents were $263.8
million and Total Financial Debt (including the net derivative
instrument position) was $688.8 million. Net Debt (Total Financial
Debt minus Cash and cash equivalents) was $425.0 million, up from
$370.0 million at the end of 2022, due to lower cash balances and
higher accrued interest on the Senior Notes.
The Net Debt to Adjusted EBITDA leverage ratio remained at a
healthy 1.0x as of the end of March 2023, with higher
trailing-twelve-month Adjusted EBITDA offsetting a modest increase
in Net Debt.
Net cash generated from operating activities for the three
months ended March 31, 2023, totaled $29.5 million versus $35.2
million in the same period last year. Cash used in net investing
activities totaled $42.0 million, with capital expenditures of
$47.0 million. Net cash used in financing activities was $17.2
million, including the first installment of the 2023 dividend and
certain open market repurchases of the Company’s outstanding debt
amounting to $4.7 million.
Recent Development
2023 Annual General Shareholders’ Meeting (AGM)
The Company held its AGM on April 28, 2023. All proposals were
approved at the meeting.
Ms. Karla Berman was elected for the first time to the Board of
Directors to serve as an independent Class III director, whose term
will expire at the annual meeting of shareholders to be held in
2026. She is a board member for Endeavor Mexico and member of the
Latin America Advisory Board for Harvard Business School. Ms.
Berman is an angel investor, non-executive co-founder of
NaranXadul.com, the largest Mommy blog in Mexico, and participates
in the Mexican version of the TV show Shark Tank. She is a former
board member of Mezcal Amarás and of the investment committee of
IGNIA.
Ms. Berman began her career in Mexico as a reporter for the
newspaper Reforma in 2002. She then worked at McKinsey &
Company in Mexico from 2003 until 2005. From 2006 until 2012 she
joined Grupo Expansion (Time Inc.) as Digital Director. In 2012,
Ms. Berman joined Google Mexico, working as head of branding
solutions for Spanish Latam and held this role until 2015 and was a
CPG Sales Director from 2016 to 2020. From 2020 until November
2021, Ms. Berman was VP of sales and Chief Marketing Officer for
Yalo Mexico, and most recently she was the Director for Softbank in
Mexico. Ms. Berman has an Industrial Engineering degree from
Universidad Iberoamericana of Mexico City, Mexico, and has an MBA
from Harvard Business School.
First Quarter 2023 Earnings Webcast
A webcast to discuss the information contained in this press
release will be held today, May 17, 2023, 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 2023 Results
Webcast.
A replay of the webcast will be available later today in the
investor section of the Company’s website:
www.arcosdorados.com/ir.
Definitions
Systemwide comparable sales growth: refers to the change,
measured in constant currency, in our Company-operated and
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). While sales by our franchisees are not
recorded as revenues by us, we believe the information is important
in understanding our financial performance because these sales are
the basis on which we calculate and record franchised revenues and
are indicative of the financial health of our franchisee base.
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: (i) currency
translation, (ii) constant currency growth. (i) Currency
translation reflects the impact on growth of the appreciation or
depreciation of the local currencies in which we conduct our
business against the US dollar (the currency in which our financial
statements are prepared). (ii) Constant currency growth reflects
the underlying growth of the business excluding the effect from
currency translation.
Adjusted EBITDA: In addition to financial measures
prepared in accordance with the general accepted accounting
principles (GAAP), within this press release and the accompanying
tables, we use a non-GAAP financial measure titled ‘Adjusted
EBITDA’. We use Adjusted EBITDA to facilitate operating performance
comparisons from period to period.
Adjusted EBITDA is defined as our operating income plus
depreciation and amortization plus/minus the following losses/gains
included within other operating income (expenses), net, and within
general and administrative expenses in our statement of income:
gains from sale, equity method investments, or insurance recovery
of property and equipment; write-offs of property and equipment;
impairment of long-lived assets; and reorganization and
optimization plan expenses.
We believe 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 10 of this
earnings release include a reconciliation for Adjusted EBITDA. For
more information, please see Adjusted EBITDA reconciliation in Note
9 – Segment and geographic information – of our financial
statements (6-K Form) filed today with the S.E.C.
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 20 Latin
American and Caribbean countries and territories with more than
2,300 restaurants, operated by the Company or by its
sub-franchisees, that together employ over 95 thousand people (as
of 03/31/2023). 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: www.arcosdorados.com/ir.
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 affordable platform, its expectation for revenue
generation and its outlook and guidance for growth and investments
in 2023. 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.
First Quarter 2023 Consolidated Results
Figure 10. First Quarter 2023 Consolidated Results(In thousands
of U.S. dollars, except per share data) For Three-Months
ended March 31,
2023
2022
REVENUES Sales by Company-operated restaurants
946,354
755,294
Revenues from franchised restaurants
44,438
35,387
Total Revenues
990,792
790,681
OPERATING COSTS AND EXPENSES Company-operated restaurant expenses:
Food and paper
(333,866
)
(263,408
)
Payroll and employee benefits
(185,317
)
(152,228
)
Occupancy and other operating expenses
(263,723
)
(220,127
)
Royalty fees
(56,739
)
(38,616
)
Franchised restaurants - occupancy expenses
(18,209
)
(16,008
)
General and administrative expenses
(65,592
)
(55,538
)
Other operating (expense) income, net
(1,061
)
3,591
Total operating costs and expenses
(924,507
)
(742,334
)
Operating income
66,285
48,347
Net interest expense and other financing results
(9,859
)
(10,659
)
Loss from derivative instruments
(4,929
)
(11,692
)
Foreign currency exchange results
7,283
15,827
Other non-operating expenses, net
(110
)
(25
)
Income before income taxes
58,670
41,798
Income tax expense
(21,026
)
(17,169
)
Net income
37,644
24,629
Net income attributable to non-controlling interests
(237
)
(126
)
Net income attributable to Arcos Dorados Holdings Inc.
37,407
24,503
Earnings per share information ($ per share): Basic net
income per common share
$
0.18
$
0.12
Weighted-average number of common shares outstanding-Basic
210,594,545
210,478,322
Adjusted EBITDA Reconciliation Operating income
66,285
48,347
Depreciation and amortization
33,520
30,136
Operating charges excluded from EBITDA computation
699
15
Adjusted EBITDA
100,504
78,498
Adjusted EBITDA Margin as % of total revenues
10.1
%
9.9
%
First Quarter 2023 Results by Division
Figure 11. First Quarter 2023 Consolidated Results by
Division(In thousands of U.S. dollars)
1Q For
Three-Months endedMarch 31, as Constant
reported Currency
2023
2022
Incr/(Decr)% Incr/(Decr)% Revenues Brazil
374,198
311,979
19.9
%
19.2
%
NOLAD
259,266
203,852
27.2
%
21.4
%
SLAD
357,328
274,850
30.0
%
88.5
%
SLAD - Excl. Venezuela
352,026
271,470
29.7
%
80.9
%
TOTAL
990,792
790,681
25.3
%
43.9
%
TOTAL - Excl. Venezuela
985,490
787,301
25.2
%
41.1
%
Operating Income (loss)
Brazil
44,090
32,021
37.7
%
37.0
%
NOLAD
13,947
13,233
5.4
%
1.4
%
SLAD
33,462
23,826
40.4
%
135.1
%
SLAD - Excl. Venezuela
34,876
25,237
38.2
%
130.8
%
Corporate and Other
(25,214
)
(20,733
)
-21.6
%
-69.3
%
TOTAL
66,285
48,347
37.1
%
61.7
%
TOTAL - Excl. Venezuela
67,700
49,758
36.1
%
61.6
%
Adjusted EBITDA Brazil
59,473
46,038
29.2
%
28.5
%
NOLAD
23,700
21,402
10.7
%
6.3
%
SLAD
40,716
30,316
34.3
%
107.4
%
SLAD - Excl. Venezuela
41,824
31,460
32.9
%
106.4
%
Corporate and Other
(23,385
)
(19,258
)
-21.4
%
-70.0
%
TOTAL
100,504
78,498
28.0
%
42.7
%
TOTAL - Excl. Venezuela
101,613
79,642
27.6
%
43.3
%
Figure 12. Average Exchange Rate per Quarter*
Brazil Mexico Argentina
1Q23
5.19
18.66
192.33
1Q22
5.23
20.50
106.56
* Local $ per 1 US$
Summarized Consolidated Balance Sheets
Figure 13. Summarized Consolidated Balance Sheets(In thousands
of U.S. dollars) March 31, December 31,
2023
2022
ASSETS
Current assets Cash and cash equivalents
231,395
266,937
Short-term investment
32,434
37,459
Accounts and notes receivable, net
116,916
124,273
Other current assets (1)
208,114
196,873
Derivative instruments
55,263
58,821
Total current assets
644,122
684,363
Non-current assets Property and equipment, net
901,069
856,085
Net intangible assets and goodwill
60,979
54,569
Deferred income taxes
91,662
87,972
Derivative instruments
32,986
34,088
Equity method investments
16,269
14,708
Leases right of use assets, net
864,376
820,683
Other non-current assets (2)
90,141
84,162
Total non-current assets
2,057,482
1,952,267
Total assets
2,701,604
2,636,630
LIABILITIES AND EQUITY
Current liabilities Accounts payable
316,733
353,468
Taxes payable (3)
144,854
146,682
Accrued payroll and other liabilities
139,206
115,327
Other current liabilities (4)
18,851
21,280
Provision for contingencies
2,305
2,272
Interest payable
18,143
7,906
Financial debt (5)
30,680
29,566
Operating lease liabilities
87,003
82,911
Total current liabilities
757,775
759,412
Non-current liabilities Accrued payroll and other
liabilities
30,445
28,781
Provision for contingencies
46,596
42,567
Financial debt (6)
728,207
729,838
Deferred income taxes
6,050
3,931
Operating lease liabilities
777,124
747,674
Total non-current liabilities
1,588,422
1,552,791
Total liabilities
2,346,197
2,312,203
Equity Class A shares of common stock
389,393
389,393
Class B shares of common stock
132,915
132,915
Additional paid-in capital
9,226
9,206
Retained earnings
422,321
424,936
Accumulated other comprehensive losses
(580,106
)
(613,460
)
Common stock in treasury
(19,367
)
(19,367
)
Total Arcos Dorados Holdings Inc shareholders’ equity
354,382
323,623
Non-controlling interest in subsidiaries
1,025
804
Total equity
355,407
324,427
Total liabilities and equity
2,701,604
2,636,630
(1)
Includes "Other receivables",
"Inventories", "Prepaid expenses and other current assets", and
"McDonald's Corporation's indemnification for contingencies".
(2)
Includes "Miscellaneous", "Collateral
deposits", and "McDonald’s Corporation indemnification for
contingencies".
(3)
Includes "Income taxes payable" and "Other
taxes payable".
(4)
Includes "Royalties payable to McDonald’s
Corporation.
(5)
Includes "Short-term debt”, “Current
portion of long-term debt" and "Derivative instruments”.
(6)
Includes "Long-term debt, excluding
current portion" and "Derivative instruments".
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230517005188/en/
Investor Relations Contact Dan Schleiniger VP of Investor
Relations Arcos Dorados daniel.schleiniger@mcd.com.uy
Media Contact David Grinberg VP of Corporate
Communications Arcos Dorados david.grinberg@mcd.com.uy
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