Arcos Dorados (ARCO) Reports Q4 EPS of $0.11, Revenues Beat

Arcos Dorados (NYSE: ARCO) reported Q4 EPS of $0.11, versus $0.16 reported last year. Revenue for the quarter came in at $605.7 million versus the consensus estimate of $565 million.

Fourth Quarter 2020 Highlights – Excluding Venezuela

• Consolidated revenues totaled $605.7 million, 19.5% lower in US dollars, or 5.3% lower on a constant currency basis1, versus the prior year period.
• Systemwide comparable sales1 declined 7.9% versus the prior year quarter, despite a tough comparison, reflecting another strong sequential quarterly improvement.
• Food and Paper costs declined by nearly 35 basis points as a percentage of sales at company-operated restaurants, compared with the prior year period.
• All four Divisions added to a positive Consolidated Adjusted EBITDA1 margin of 9.6%, compared to 5.5% in 3Q20 and 13.5% in 4Q19, which included a 130 basis point contribution from a non-cash bad debt reserve reversal in Puerto Rico.
• Basic net income per share was $0.12, compared to basic net income of $0.18 per share in the prior year quarter.

“In 2020 we faced the most unexpected and unprecedented crisis of our lifetimes, forcing us to find new ways to work in our restaurants and offices while managing a business with an enormous geographic footprint and a vast network of suppliers and sub-franchisees. We met the challenge because of our proactive and aggressive responses to the crisis. But also because we have historically taken a long-term, strategic approach to growth. Our best-in-class free-standing restaurant footprint supported the strong growth of Drive-thru, Delivery and Digital throughout the year. We strengthened the McDonald’s brand through significant market share gains in many key markets. The McProtegidos program also contributed to Brand trust, consolidating McDonald’s as the safest restaurant experience in the QSR industry. Financial results improved steadily during the second half of 2020 and our disciplined financial management ensured a relatively modest increase in financial leverage despite the material impact of the pandemic on full year results,” said Marcelo Rabach, Chief Executive Officer of Arcos Dorados.

“Looking ahead, we are increasing our commitment to make a positive influence on the communities we serve. I am proud to announce that Arcos Dorados is the first major restaurant operator in Latin America and the Caribbean to incorporate ESG indicators in its executive variable compensation program. Starting this year, in order to reach their full variable compensation targets, our bonus-eligible employees will need to meet objectives related to youth opportunity as well as responsible and ethical business practices. With respect to this year’s financial results, we expect some uncertainty in the short-term, but we firmly believe Arcos Dorados is poised for long-term success as market conditions normalize over the course of 2021,” he concluded.

For earnings history and earnings-related data on Arcos Dorados (ARCO) click here.

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