Arcos Dorados (NYSE:ARCO) Announces Earnings Results, Misses Estimates By $0.08 EPS

Posted by Doug Wharley on Mar 21st, 2026

Arcos Dorados (NYSE:ARCO – Get Free Report) released its earnings results on Thursday. The restaurant operator reported $0.12 EPS for the quarter, missing the consensus estimate of $0.20 by ($0.08), FiscalAI reports. Arcos Dorados had a return on equity of 8.64% and a net margin of 4.53%.The company had revenue of $1.27 billion for the quarter, compared to analyst estimates of $1.26 billion. During the same period in the previous year, the firm earned $0.28 earnings per share. The company’s revenue for the quarter was up 10.7% compared to the same quarter last year.

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

Arcos Dorados reported a strong Q4 with total revenue of $1.3 billion (+10.7%) and system‑wide comparable sales up 16%, while adjusted EBITDA rose 17.2% to $172.7 million (80 bps margin expansion); full‑year adjusted EBITDA was the highest in company history, though materially aided by recognized tax benefits.
Digital and loyalty initiatives continue to drive share and sales, with digital channels representing 62% of sales, 27.2 million loyalty members, and the company opening 102 restaurants in 2025 while modernizing the portfolio to 73%.
Brazil showed improving sequential trends and market‑share protection via the Economia value platform (roughly 2x nearest competitor), but consumption remains weak and beef inflation pressured margins earlier in 2025 despite gross‑margin recovery beginning in Q4 and into early 2026.
Management executed capital‑structure optimization: a BRL $150m bank loan (matures 2029, ~2.53% USD‑equivalent) funded a tender for ~$135m of 2029 notes, lowering the average cost of debt and increasing interest deductibility.
Cost and capital discipline are priorities — a completed G&A/headcount restructuring trims ongoing costs by >$10 million annually (with an $8.7m EBITDA add‑back), 2026 guidance calls for 105–115 openings and $275–325m CapEx, and the board raised the dividend to $0.28/share.

Arcos Dorados Stock Performance

Shares of NYSE ARCO opened at $7.68 on Friday. The stock’s 50-day simple moving average is $8.16 and its 200-day simple moving average is $7.51. Arcos Dorados has a fifty-two week low of $6.51 and a fifty-two week high of $8.98. The company has a debt-to-equity ratio of 1.32, a current ratio of 0.89 and a quick ratio of 0.81.

Arcos Dorados Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 29th. Stockholders of record on Wednesday, December 23rd will be issued a $0.07 dividend. The ex-dividend date is Wednesday, December 23rd. This represents a $0.28 dividend on an annualized basis and a dividend yield of 3.6%. Arcos Dorados’s dividend payout ratio is presently 20.51%.

Trending Headlines about Arcos Dorados

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

Positive Sentiment: Company raised its quarterly dividend to $0.07 (a 16.7% increase vs prior quarter) implying ~3.6% yield — supports income-focused demand for the shares.
Positive Sentiment: Management highlighted strong digital growth and revenue expansion that helped offset some margin headwinds; company reiterated cost controls are tightening to protect profitability. Arcos Dorados Holdings Inc (ARCO) Q4 2025 Earnings Call Highlights: Strong Digital Growth and …
Neutral Sentiment: Full earnings call transcripts and summaries are available for investors who want detail on regional trends, promotion cadence and margin drivers. Arcos Dorados Holdings Inc. (ARCO) Q4 2025 Earnings Call Transcript
Neutral Sentiment: Deep-dive coverage notes revenue growth offsets some cost pressure but flags margin sensitivity to inflation and FX — useful for modeling near-term margins. ARCO Q4 Deep Dive: Revenue Growth Offsets Margin Pressure as Cost Controls Tighten
Negative Sentiment: Reported EPS of $0.12 missed the $0.20 consensus (and compares to prior-year EPS), which pressured sentiment despite the revenue beat — an immediate negative for short-term momentum. Arcos Dorados (ARCO) Reports Q4 Loss, Beats Revenue Estimates
Negative Sentiment: Company filed audited 2025 financials; the auditor flagged potential Brazilian tax risks — a regulatory/tax exposure that could increase future liabilities or volatility. Arcos Dorados Files 2025 Audited Financials, Auditor Flags Brazilian Tax Risks
Negative Sentiment: Analyst commentary (Seeking Alpha) argues the Q4 print and structural challenges (low margins, volatile markets, brand positioning) don’t justify an upgrade — keeps a near-term “hold” view on valuation (~12x forward EPS). Arcos Dorados: Q4 Earnings Don’t Merit An Upgrade

Institutional Trading of Arcos Dorados

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in ARCO. Lazard Asset Management LLC boosted its holdings in shares of Arcos Dorados by 35.3% in the 3rd quarter. Lazard Asset Management LLC now owns 20,128,477 shares of the restaurant operator’s stock valued at $135,867,000 after buying an additional 5,255,199 shares in the last quarter. SPX Gestao de Recursos Ltda boosted its stake in Arcos Dorados by 19.1% in the fourth quarter. SPX Gestao de Recursos Ltda now owns 7,551,676 shares of the restaurant operator’s stock valued at $55,429,000 after acquiring an additional 1,209,055 shares in the last quarter. Renaissance Technologies LLC grew its holdings in shares of Arcos Dorados by 312.7% during the fourth quarter. Renaissance Technologies LLC now owns 1,049,734 shares of the restaurant operator’s stock worth $7,705,000 after purchasing an additional 795,400 shares during the last quarter. Millennium Management LLC lifted its holdings in shares of Arcos Dorados by 1,097.5% in the 3rd quarter. Millennium Management LLC now owns 646,470 shares of the restaurant operator’s stock valued at $4,364,000 after purchasing an additional 592,484 shares during the last quarter. Finally, Goldman Sachs Group Inc. lifted its holdings in shares of Arcos Dorados by 83.1% in the 4th quarter. Goldman Sachs Group Inc. now owns 1,127,060 shares of the restaurant operator’s stock valued at $8,273,000 after purchasing an additional 511,468 shares during the last quarter. Institutional investors and hedge funds own 55.91% of the company’s stock.

Analyst Upgrades and Downgrades

Several equities analysts have recently issued reports on the company. Zacks Research upgraded Arcos Dorados from a “strong sell” rating to a “hold” rating in a research note on Friday, November 21st. Weiss Ratings reiterated a “hold (c-)” rating on shares of Arcos Dorados in a report on Monday, December 29th. Three investment analysts have rated the stock with a Hold rating, According to data from MarketBeat, Arcos Dorados presently has a consensus rating of “Hold” and a consensus target price of $8.70.

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About Arcos Dorados

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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.