Arcos Dorados Holdings Inc. (NYSE:ARCO) reported fourth-quarter sales of $1.267 billion, beating the Street view of $1.241 billion. The EPS of 12 cents missed the consensus of 20 cents.

Quarterly results reflected a $33.8 million net tax benefit in Brazil, which the company expects to convert to cash over the next five years.

Notably, Arcos Dorados is the world's largest independent McDonald's Corporation (NYSE:MCD) franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean.

Quarterly Metrics

Systemwide comparable sales climbed 16.0% year over year (Y/Y), fueling higher total company revenue growth of 10.7% Y/Y.

Digital channel revenue jumped 18.7% Y/Y and accounted for 62% of total systemwide sales in the quarter. This was led by strong sales in the Self-order kiosk, Delivery, and Loyalty sales.

Brazil's systemwide comparable sales improved sequentially versus the third quarter of 2025, while Mexico and Argentina supported the consolidated result with systemwide comparable sales growth of 1.5x and 1.3x blended inflation, respectively.

Adjusted EBITDA of $172.7 million, higher than $147.4 million in the prior-year quarter. Adjusted EBITDA margin expanded to 13.6% from 12.9% a year ago.

Arcos Dorados said it has opened 48 restaurants in the fourth quarter of 2025, 41 of which were free-standing locations.

The company stated that 73% of restaurants in its footprint were modernized by the end of the quarter. Arcos exited the year with cash and equivalents worth $373.4 million.

Outlook

Arcos Dorados continues to expect to open 105 to 115 restaurants in 2026.

The company sees capital expenditures of $275 million-$325 million for 2026.

ARCO Price Action: Arcos Dorados Holdings shares were down 2.08% at $7.51 at the time of publication on Thursday, according to Benzinga Pro data.

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