Arcos Dorados Holdings Inc. reported total revenue of $1.27 billion for the fourth quarter of 2025, a 10.7% increase in U.S. dollars from the same period a year earlier. The growth was driven by a 16% rise in comparable sales across Brazil, Mexico, and Argentina, and by a 62% share of systemwide sales coming from digital channels—mobile app, delivery, and self‑order kiosks—up from 61% for the full year.
Fourth‑quarter earnings per share fell to $0.12, missing the consensus estimate of $0.24 (or $0.20) by 50% (or 40.5%). The miss was largely attributable to higher operating costs, including restructuring and one‑time charges, which compressed the operating margin from 9% in Q4 2024 to 1.1% in Q4 2025, even as adjusted EBITDA margin expanded to 13.6% from 12.9% year‑over‑year.
Adjusted EBITDA for the quarter reached $575.2 million, up 17.2% from the prior year. The improvement was driven by the higher digital‑sales mix and disciplined cost management, but the operating margin contraction reflects the impact of reorganization expenses and other non‑recurring items.
The loyalty program remained active in more than 90% of the company’s restaurants and grew to 27 million registered members by year‑end, up from 15.8 million in 2024. The expansion of the program supports the company’s digital strategy and helps sustain customer engagement across its markets.
Management guided for 2026 earnings, forecasting $0.31 per share for Q1 and $0.33 for Q2, and projected the opening of 105–115 new restaurants during the year. These outlooks signal confidence in continued growth, particularly in digital and modernized formats.
In the days following the release, the market reacted negatively, with the stock falling 0.65% in pre‑market trading and 2.9% after the announcement, largely because the EPS miss outweighed the revenue and EBITDA beat.
"Our focus on digital transformation and operational efficiency has driven robust revenue growth, despite the EPS shortfall," said CEO Luis Raganato. "The fourth quarter of 2025 marked a solid finish to the year with double‑digit revenue growth, expanded margins, and strong adjusted EBITDA growth despite ongoing cost and consumer pressures in certain markets. Importantly, we exited the year with improving trends, particularly in Brazil, as well as continued momentum in Mexico and SLAD."
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