Q2 FY2026
Filed Aug 13, 2026Arcos Dorados Reports Second Quarter 2026 Financial Results
Total revenues reached $1.3 billion, the Company’s highest quarterly revenues, while Adjusted EBITDA rose 15.2%, net income attributable to Arcos Dorados Holdings Inc. rose 99.3%, and earnings per share increased to $0.22 from $0.11.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Sales by Company-operated restaurantsGAAP | $1.25B | – | 14.2% |
| Revenues from franchised restaurantsGAAP | $59.08M | – | 15.4% |
| Total RevenuesGAAP | $1.31B | – | 14.3% |
| Systemwide Comparable Salesnon-GAAP | 15.3% | – | – |
| Total Restaurantsother | 2,548 | – | – |
| Total operating costs and expensesGAAP | −$1.23B | – | – |
| Operating incomeGAAP | $72.63M | – | 16.3% |
| Net incomeGAAP | $45.10M | – | – |
| Net income attributable to Arcos Dorados Holdings Inc.GAAP | $45.01M | – | 99.3% |
| Net income attributable to Arcos Dorados Holdings Inc. Margin as % of total revenuesGAAP | 3.4% | – | 1.5 p.p. |
| Basic net income per common shareGAAP | $ 0.22 | – | – |
| Weighted-average number of common shares outstanding-BasicGAAP | 210,663,057 | – | – |
| Adjusted EBITDAnon-GAAP | $126.8M | – | 15.2% |
| Adjusted EBITDA Margin as % of total revenuesnon-GAAP | 9.7% | – | 0.1 p.p. |
| Six-month Total RevenuesGAAP | $2.52B | – | 13.6% |
| Six-month Operating incomeGAAP | $135.4M | – | 25.8% |
| Six-month Net income attributable to Arcos Dorados Holdings Inc.GAAP | $81.15M | – | – |
| Six-month Basic net income per common shareGAAP | $ 0.39 | – | – |
| Six-month Adjusted EBITDAnon-GAAP | $244.8M | – | 21.6% |
| Net cash provided by operating activities for the six months ended June 30GAAP | $123.5M | – | – |
| Adjusted Free Cash Flow for the LTM ended June 30non-GAAP | $143.4M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| BrazilGuest traffic growth supported comparable sales, while higher average check in Brazil supported total systemwide comparable sales growth. | $520.6M | – | 25.3% |
| NOLADGuest traffic grew across all three divisions, although NOLAD systemwide comparable sales were -2.2%. | $347.5M | – | 9.3% |
| SLADGuest traffic growth and higher average check in SLAD supported performance; systemwide comparable sales increased 42.9%. | $437.5M | – | 7.0% |
Capital returns
- Dividend payments to Arcos Dorados Holdings Inc.’s shareholders were $(29,493) thousand for the six months ended June 30, 2026, compared with $(25,280) thousand for the six months ended June 30, 2025.
- On July 16, 2026, the Company completed the redemption of all remaining 2029 Sustainability-Linked Senior Notes at a redemption price equal to 103.063%, plus accrued and unpaid interest.
- Cash Tender and Open Market Repurchases of 2029 and 2027 Senior Notes were $(158,075) thousand for the six months ended June 30, 2026, compared with $(379,265) thousand for the six months ended June 30, 2025.
What drove it
- Systemwide comparable sales rose 15.3%, driven by guest traffic growth across all three divisions and higher average check in Brazil and SLAD.
- Digital channel sales rose by about 25% and represented 66% of second-quarter systemwide sales.
- The Loyalty Program grew to 34.3 million registered members as of the end of the quarter.
- The Company opened 16 restaurants in the second quarter of 2026, including 10 freestanding units.
- Consolidated Adjusted EBITDA margin expansion was driven by lower Food & Paper costs and G&A expenses as a percentage of revenues.
- Net income margin improvement was mainly driven by better results in net interest expense and other financing results and foreign currency exchange results, as well as a lower effective tax rate.
Concerns
- NOLAD revenue increased 9.3%, while NOLAD operating income declined -36.6% and NOLAD Adjusted EBITDA declined -18.3%.
- Consolidated Adjusted EBITDA margin benefited from lower Food & Paper costs and G&A expenses as a percentage of revenues but was partially offset by higher Payroll and Occupancy & Other Operating Expenses.
- The Company described consumer dynamics in the second quarter of 2026 as challenging.
- Cash and cash equivalents declined to $259,990 thousand at June 30, 2026 from $373,438 thousand at December 31, 2025.
What to watch
- Whether guest traffic growth and market share gains continue across all three divisions.
- NOLAD comparable sales, which were -2.2% in the second quarter of 2026, and the division's operating-income and Adjusted EBITDA trends.
- The durability of digital sales penetration at 66% of systemwide sales and growth in the 34.3 million-member Loyalty Program.
- Margin effects from Food & Paper, Payroll, and Occupancy & Other Operating Expenses.
- Restaurant development following 16 openings in the second quarter and modernization of 77% of the systemwide restaurant portfolio.
Balance sheet and cash flow
- Cash and cash equivalents were $259,990 thousand at June 30, 2026, compared with $373,438 thousand at December 31, 2025.
- Short-term investments were $10,000 thousand at June 30, 2026, compared with $48,909 thousand at December 31, 2025.
- Total Cash & cash equivalents were $269,990 thousand at June 30, 2026, compared with $422,347 thousand at December 31, 2025.
- Total Financial Debt was $962,450 thousand at June 30, 2026, compared with $1,101,739 thousand at December 31, 2025.
- Net Financial Debt was $692,460 thousand at June 30, 2026, compared with $679,392 thousand at December 31, 2025.
- Net Financial Debt / LTM Adjusted EBITDA ratio was 1.1 at June 30, 2026, compared with 1.2 at December 31, 2025.
- Property and equipment expenditures were $(85,879) thousand for the six months ended June 30, 2026, compared with $(104,153) thousand for the six months ended June 30, 2025.
- Net cash used in investing activities was $(48,122) thousand for the six months ended June 30, 2026, compared with $(202,250) thousand for the six months ended June 30, 2025.
- Net cash used in financing activities was $(187,002) thousand for the six months ended June 30, 2026, compared with net cash provided by financing activities of $159,062 thousand for the six months ended June 30, 2025.
Analysis
Arcos Dorados reported a strong second quarter, with Total Revenues of $1,305,634 thousand, up 14.3%, and systemwide comparable sales growth of 15.3%. The Company characterized this as its highest-ever quarterly revenue result. Guest traffic increased in all three divisions, while higher average check supported Brazil and SLAD. Brazil generated $520,604 thousand of revenue, NOLAD generated $347,490 thousand, and SLAD generated $437,540 thousand.
Digital, loyalty, value and FIFA World Cup-linked activity were central reported demand drivers. Digital channel sales rose by about 25% and accounted for 66% of systemwide sales. The loyalty program reached 34.3 million registered members, and the Company said active redeeming members visited restaurants roughly five times as frequently as non-members. The restaurant network reached 2,548 units after 16 openings in the quarter, including 10 freestanding units, and 77% of the portfolio offered the most modernized restaurant experience.
Profitability improved despite the consumer backdrop. Operating income increased to $72,632 thousand from $62,460 thousand, while Adjusted EBITDA rose to $126,819 thousand from $110,111 thousand. Adjusted EBITDA margin increased to 9.7% from 9.6%, with lower Food & Paper costs and G&A expenses as a percentage of revenues partly offset by higher Payroll and Occupancy & Other Operating Expenses. Net income attributable to Arcos Dorados Holdings Inc. increased to $45,005 thousand from $22,587 thousand, and basic net income per common share was $0.22 compared with $0.11. Management cited improved net interest expense and other financing results, foreign currency exchange results, and a lower effective tax rate as principal contributors to net-income margin expansion.
Performance was uneven by division. Brazil delivered revenue growth of 25.3%, operating-income growth of 57.6%, and Adjusted EBITDA growth of 43.2%. SLAD revenue grew 7.0%, with systemwide comparable sales growth of 42.9%. In NOLAD, revenue rose 9.3%, but operating income declined -36.6%, Adjusted EBITDA declined -18.3%, and systemwide comparable sales were -2.2%. These NOLAD results stand out against consolidated growth and merit attention in subsequent periods.
Cash generation and leverage metrics improved on the reported measures. LTM Adjusted Free Cash Flow was $143,384 thousand compared with $16,144 thousand in the prior comparable period. Net cash provided by operating activities for the six months ended June 30 was $123,497 thousand compared with $57,706 thousand. Total Financial Debt was $962,450 thousand and Net Financial Debt was $692,460 thousand at June 30, while the Net Financial Debt / LTM Adjusted EBITDA ratio was 1.1, compared with 1.2 at year-end 2025. The release did not provide quantified forward guidance.
Management, verbatim
Total Revenues, Adjusted EBITDA and Net Income all grew strongly in US dollars, despite challenging consumer dynamics in the second quarter of 2026.
Luis Raganato, Chief Executive Officer
The exclusive, global sponsorship of the FIFA World Cup allowed us to execute marketing campaigns and activations in all sales channels.
Luis Raganato, Chief Executive Officer
Digital sales penetration and identified sales were the highest ever and we measured market share gains across the region as well.
Luis Raganato, Chief Executive Officer
Not in the filing
stated, not guessed- Quantified forward guidance for 2026 or any future period
- Gross profit and gross margin
- Diluted earnings per share
- Quarterly operating cash flow
- Quarterly free cash flow
- Share repurchases
- Prior-quarter revenue, operating income, net income, EPS, and Adjusted EBITDA comparisons
- Detailed segment revenue drivers quantified by division
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.