CORRECTED-Arcos Dorados Holdings Q4 profit falls on higher tax, restructuring costs

Overview

• Latin America restaurant chain's Q4 revenue grew 10.7% yr/yr to $1.3 bln

• Adjusted EBITDA for Q4 rose 17.2% yr/yr, reaching a full-year record

• Company opened 48 new restaurants in Q4, exceeding company's full-year guidance

Outlook

• Arcos Dorados plans to open 105 to 115 restaurants in 2026

• Company expects 2026 capital expenditures of $275 mln to $325 mln

• Company says it is focused on increasing efficiency and monetizing market share gains in 2026

Result Drivers

• DIGITAL SALES GROWTH - Digital channels, including mobile app, delivery, and self-order kiosks, accounted for 62% of systemwide sales in Q4, supporting overall sales growth

• MARKETING AND MENU INITIATIVES - Integrated menu strategies, value platforms, and marketing campaigns, including tie-ins with popular media and new product launches, boosted sales and consumer engagement

• HIGHER TAX AND RESTRUCTURING COSTS - Net income declined mainly due to higher income tax expense and $8.7 mln in reorganization and optimization expenses

Company press release: ID:nBw6NKm5Xa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy"

• Wall Street's median 12-month price target for Arcos Dorados Holdings Inc is $11.00, about 42.9% above its March 18 closing price of $7.70

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.