The record Q2 results and continued deleveraging (net debt/EBITDA at 1.1x, 2029 notes fully redeemed) confirm a strong operational and financial trajectory. Monitor the NOLAD division's negative comparable sales (-2.2%) and the impact of FIFA World Cup marketing tailwinds in the coming quarters. The increased dividend signals management confidence in cash flow generation.
Price Chart
Executive Summary
Arcos Dorados reported record Q2 2026 results with total revenues of $1.3 billion (up 14.3% YoY), Adjusted EBITDA of $126.8 million (up 15.2%), and net income of $45.0 million ($0.22 EPS, up from $0.11). The company also completed the redemption of its remaining 2029 Senior Notes in July 2026, further deleveraging the balance sheet. Combined with the prior 20-F annual report showing record FY2025 results, this filing confirms a strong operational and financial trajectory.
Key Facts
- Total revenues of $1.3 billion in Q2 2026, up 14.3% YoY, the highest quarterly revenues in company history.
- Consolidated Adjusted EBITDA of $126.8 million, up 15.2% YoY, also a Q2 record.
- Net income of $45.0 million ($0.22 EPS) doubled from $22.6 million ($0.11 EPS) in Q2 2025.
- Systemwide comparable sales rose 15.3% in Q2 2026, driven by the best guest volume performance in six quarters.
- Adjusted Free Cash Flow over the last twelve months reached $143.4 million, up from $16.1 million in the prior comparable period.
- Net debt to Adjusted EBITDA leverage ratio improved to 1.1x at Q2 2026 from 1.2x at year-end 2025.
- On July 16, 2026, the company completed the redemption of all remaining 2029 Sustainability-Linked Senior Notes.
- Digital channel sales represented 66% of systemwide sales in Q2 2026, up about 25% YoY.
- The company opened 16 new restaurants in Q2 2026, bringing total to 2,548.
- Quarterly dividend increased to $0.28 per share for 2026, up from $0.24 per share in 2025.
Financial Impact
Q2 2026 revenues of $1.3B (up 14.3% YoY), Adjusted EBITDA of $126.8M (up 15.2%), net income of $45.0M (up 99.3%), EPS of $0.22 (up 100%). LTM Adjusted Free Cash Flow of $143.4M (up from $16.1M). Net debt/EBITDA leverage at 1.1x.
Risk Factors
- NOLAD division saw negative comparable sales of -2.2% in Q2 2026, down from +4.4% in Q2 2025.
- Currency volatility in Latin America, particularly in Argentina (highly inflationary) and Venezuela, could impact reported results.
- Consumer spending dynamics remain challenging across the region, as noted by management.
- Contingent tax liabilities in Brazil of $46.96 million and other legal contingencies represent potential cash outflows.
- The company operates under Master Franchise Agreements with McDonald's Corporation, creating dependency on that relationship.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 9 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (ARCO) — Batch item 1 | 0000950103-26-012286 |
| Document: 0000950103-26-012286-index-headers.html | 0001628280-26-056473 |
| Document: 0000950103-26-012286-index.html | 0000950103-26-012286 |
| Document: 0000950103-26-012286.txt | 0000950103-26-012286 |
| 6-K Filing (ARCO) — Batch item 5 | 0001628280-26-056473 |
| Document: 0001628280-26-056473-index-headers.html | 0000950103-26-012286 |
| Document: 0001628280-26-056473-index.html | 0000950103-26-012286 |
| Document: 0001628280-26-056473.txt | 0000950103-26-012286 |
| 6-K Filing (ARCO) — Batch item 9 | 0000950103-26-012286 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 1, 2026 26d ago | 6-K | $6.91 $7.11 | ▲ +2.89% | ▲ +2.15% | $7.00 (+1.30%) |
Aug 13, 2026 10w ago | 6-K | $8.14 $7.91 | ▼ −2.83% | ▼ −2.63% | $7.00 (−14.00%) |
Aug 13, 2026 10w ago | 6-K | $8.14 $7.91 | ▼ −2.83% | ▼ −2.63% | $7.00 (−14.00%) |
May 20, 2026 22w ago | 6-K | $9.08 $9.15 | ▲ +0.77% | ▲ +0.58% | $7.00 (−22.91%) |
May 20, 2026 22w ago | 6-K | $9.08 $9.15 | ▲ +0.77% | ▲ +0.58% | $7.00 (−22.91%) |
Apr 30, 2026 25w ago | 20-F | $8.78 $8.65 | ▼ −1.48% | ▼ −1.14% | $7.00 (−20.27%) |
Mar 26, 2026 30w ago | 6-K | $8.00 $7.93 | ▼ −0.88% | ▼ −0.52% | $7.00 (−12.50%) |
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