Zacks Investment Research·Jun 23, 2026
Are Retail-Wholesale Stocks Lagging Arcos Dorados (ARCO) This Year?Here is how Arcos Dorados (ARCO) and Five Below (FIVE) have performed compared to their sector so far this year.
Arcos Dorados Holdings Inc.(ARCO)Earnings, Financials & Key Ratios
ARCO•NYSE
$8.24
8.2× P/E·Price updated Jul 7, 2026
AboutArcos Dorados Holdings Inc. operates as a franchisee of McDonald's restaurants. The company has the exclusive right to own, operate, and grant franchises of McDonald's restaurants in 20 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela. As of December 31, 2021, it operated or franchised 2,261 restaurants. The company was founded in 2007 and is based in Montevideo, Uruguay.Show more
- Revenue$4.68B+4.7%
- EBITDA$547M+9.1%
- Net Income$212M+42.6%
- EPS (Diluted)1.01+42.3%
- Gross Margin12.27%-6.5%
- EBITDA Margin11.7%+4.2%
- Operating Margin7.49%+3.1%
- Net Margin4.53%+36.2%
- ROE33.1%+14.2%
ARCO Price & Volume
Arcos Dorados Holdings Inc. (ARCO) stock price & volume — 10-year historical chart
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Cyclical Margin Volatility Masks Structural Franchise Constraints
Investment Thesis • Updated 2026Q1
VerdictNeutral
Growth:Mixed
Profitability:Strained
Financial:Mixed
Cash Flow:Mixed
Primary Risk:MFA Renewal and FX Volatility
Key Thesis Takeaways
- Arcos Dorados operates under a rigid Master Franchise Agreement that mandates consistent capital expenditure, resulting in highly cyclical free cash flow and volatile net margins ranging from 1.3% to 12.6%.
- While the company achieved 12.9% revenue growth in 2026Q1, its reliance on regional macroeconomic stability and currency translation creates significant earnings unpredictability.
- Investors should monitor the company's elevated debt-to-equity ratio of 2.81 and its persistent reliance on capital-intensive store modernizations to maintain its competitive market position.
Verdict Logic
while the stock trades at a modest 6.62x EV/EBITDA, the persistent volatility in net margins and the structural requirement to fund ongoing store modernizations warrant a cautious approach.
ARCO Growth Metrics
Arcos Dorados Holdings Inc. (ARCO) revenue, earnings & EPS growth — 3, 5 & 10-year CAGR
Revenue CAGR
10 Years4.36%
5 Years18.71%
3 Years8.94%
TTM7.89%
Profit CAGR
10 Years-
5 Years-
3 Years14.76%
TTM74.64%
EPS CAGR
10 Years-
5 Years-
3 Years14.66%
TTM71.8%
Return on Capital
10 Years12.97%
5 Years13.32%
3 Years14.69%
Last Year13.51%
ARCO Recent Earnings
Arcos Dorados Holdings Inc. (ARCO) EPS & revenue vs analyst estimates — last 4 quarters
●Beat EPS 6/12 qtrs (50%)●Beat Revenue 6/12 qtrs (50%)
Q2 2026Latest
May 20, 2026Metric
Actual
Est
EPS
$0.17+54.5%
$0.11
Rev
$1.2B+0.5%
$1.2B
Q2 2026
Mar 19, 2026Metric
Actual
Est
EPS
$0.04-119.7%
$0.20
Rev
$1.3B+0.3%
$1.3B
Q4 2025
Nov 12, 2025Metric
Actual
Est
EPS
$0.12+20.0%
$0.10
Rev
$1.2B-5.5%
$1.3B
Q3 2025
Aug 13, 2025Metric
Actual
Est
EPS
$0.11+120.0%
$0.05
Rev
$1.1B-5.1%
$1.2B
| Quarter | Date | EPS (Act vs Est) | Revenue (Act vs Est) |
|---|---|---|---|
| Q2 2026Latest | May 20, 2026 | $0.17vs $0.11+54.5% | $1.2Bvs $1.2B+0.5% |
| Q2 2026 | Mar 19, 2026 | $0.04vs $0.20-119.7% | $1.3Bvs $1.3B+0.3% |
| Q4 2025 | Nov 12, 2025 | $0.12vs $0.10+20.0% | $1.2Bvs $1.3B-5.5% |
| Q3 2025 | Aug 13, 2025 | $0.11vs $0.05+120.0% | $1.1Bvs $1.2B-5.1% |
Based on last 12 quarters of dataView full earnings history →
Latest ARCO News
Recent stock market news and headlines for Arcos Dorados Holdings Inc. (ARCO)
Zacks Investment Research·Jun 23, 2026
Is Arcos Dorados (ARCO) Stock Undervalued Right Now?Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Peers Comparison
Key metrics vs top competitors for Arcos Dorados Holdings Inc. (ARCO)
| Company | Price | Market Cap | P/E Ratio | Rev Growth (1Y) | Net Margin | ROE | Div Yield |
|---|---|---|---|---|---|---|---|
| $8.24 | $1.74B | 8.16 | 4.66% | 4.53% | 33.1% | 2.91% | |
| $73.94 | $25.62B | 31.46 | 12.23% | 9.96% | 18.45% | — | |
| $167.49 | $46.3B | 30.12 | 8.81% | 20.48% | — | — | |
| $15.68 | $299.07M | -3.72 | -6.75% | 2.82% | — | — | |
| $6.25 | $321.87M | 15.24 | -2.5% | 2.24% | — | — | |
| $0.16 | $3.02M | -0.01 | 23.35% | -39.33% | — | — |
Compare ARCO vs Peers
Arcos Dorados Holdings Inc. (ARCO) vs competitors — business, growth, and fundamentals comparison against the closest industry rivals.
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ARCO Frequently Asked Questions
Arcos Dorados Holdings Inc. (ARCO) stock FAQ — growth, dividends, profitability & financials explained
Growth & Financials
What is Arcos Dorados Holdings Inc.'s revenue?
Arcos Dorados Holdings Inc. (ARCO) reported $4.82B in revenue for fiscal year 2025. This represents a 85% increase from $2.61B in 2008.
How fast is Arcos Dorados Holdings Inc. growing?
Arcos Dorados Holdings Inc. (ARCO) grew revenue by 4.7% over the past year. Growth has been modest.
Is ARCO profitable?
Yes, Arcos Dorados Holdings Inc. (ARCO) is profitable, generating $234.3M in net income for fiscal year 2025 (4.5% net margin).
Dividend & Returns
Does ARCO pay dividends?
Yes, Arcos Dorados Holdings Inc. (ARCO) pays a dividend with a yield of 2.91%. This makes it attractive for income-focused investors.
What is ARCO's return on equity?
Arcos Dorados Holdings Inc. (ARCO) has a return on equity (ROE) of 33.1%. This is excellent, indicating efficient use of shareholder capital.
What is Arcos Dorados Holdings Inc.'s free cash flow?
Arcos Dorados Holdings Inc. (ARCO) generated $54.8M in free cash flow for fiscal year 2025. Positive FCF indicates the company can fund dividends, buybacks, or reinvestment.