News

Arcos Dorados Q2 revenue up almost 30 percent

August 1, 2011

Buenos Aires, Argentina-based Arcos Dorados Holdings Inc., the world's largest McDonald's franchisee, reported results for the second quarter ended June 30.

Those results include:

• Revenues increased by 28.7 percent year-over-year to $888.5 million (U.S.);
• Systemwide same-store sales increased 14.8 percent year-over-year;
• 72 net additions of restaurants over the last 12 months;
• Adjusted EBITDA increased by 47.6 percent year-over-year to $67.9 million; and
• Net income increased by 5.6 percent to $14.2 million.

The guidance for 2011 as a whole has been revised upward to projected growth of 22 percent to 24 percent; adjusted EBITDA growth of 18 percent to 20 percent; and net income growth of 35 percent to 45 percent.

Second quarter momentum came from the completion of Arcos Dorados' IPO and debt restructuring.

The company's solid revenue performance was driven by growth across all divisions. Brazil, the largest division, reported revenue growth of 26.9 percent year-over-year, including 10.2 percent growth in systemwide comp sales.

Mexico, Panama and Costa Rica (NOLAD) revenues increased by 21.8 percent year-over-year, with a systemwide comps increase of 9.7 percent.

Argentina, Venezuela, Colombia, Chile, Peru, Ecuador and Uruguay (SLAD) revenues grew by 43.2 percent compared to the second quarter of 2010, mainly driven by a 33.1 percent increase in systemwide comparable sales. The Caribbean division (Puerto Rico, Martinique, Guadeloupe, Aruba, Curaçao, F. Guiana, U.S. Virgin Islands of St. Thomas and St. Croix) reported revenue growth of 3.9 percent above the second quarter of 2010, and stable systemwide comparable sales.

"In the second quarter, Arcos Dorados continued to build upon its solid foundation for market growth and development. With the completion of our IPO and debt restructuring, the company is continuing to implement its strategic priorities and deliver long term attractive returns for its shareholders," said Sergio Alonso, COO. "Our ability to maintain growth and profitability in the face of inflationary pressure in several of our key operating countries highlights the success of the Arcos Dorados' menu offering, our ability to achieve the right mix of products and constantly enhance operating efficiencies."

Menu enhancements on the horizon

In late July, Arcos Dorados announced its plans to expand menu options on Oct. 1, for all of its territories to include an array of fresh produce, reduced calorie and sodium content for some of its menu items, as well as certain reduced portion sizes. In addition, it will offer a new, lower calorie Happy Meal.

The company also has appointed José Valledor to the position of divisional president of the Brazil Division. Since 2008, Valledor was the regional director for the Southern Cone operations and has more than 20 years' experience in the McDonald´s system. Brazil's current divisional president, Marcelo Rabach, has been named vice president of Operations Development for the company.

For more information on operations management, click here.