The strong Q1 beat across all segments and the debt reduction signal improving fundamentals and cash flow generation. Monitor the next 10-Q for continued margin expansion and any update on the $447M-$491M tax contingency range in Brazil. The stock's current price of $8.25 implies a ~16x trailing P/E on the annualized Q1 EPS, which is attractive given the growth trajectory.
Price Chart
Executive Summary
Arcos Dorados reported strong Q1 2026 results with total revenues of $1.216 billion (up 12.9% YoY), net income of $36.1 million (up 159% YoY), and EPS of $0.17 (up from $0.07). Adjusted EBITDA grew 29.3% to $118.0 million. The company also reduced debt via a tender offer for its 2029 Notes and maintained a $0.28/share annual dividend. All three geographic segments posted double-digit revenue growth, with Brazil leading at 17.8%.
Key Facts
- Total revenues of $1.216 billion in Q1 2026, up 12.9% from $1.077 billion in Q1 2025
- Net income attributable to Arcos Dorados of $36.1 million, up 159% from $13.9 million
- Adjusted EBITDA of $118.0 million, up 29.3% from $91.3 million
- EPS of $0.17, up 143% from $0.07
- All segments grew: Brazil +17.8%, NOLAD +14.5%, SLAD +6.9%
- Reduced 2029 Notes principal by $135.2 million via cash tender in Q1 2026
- Declared $0.28 per share annual dividend for 2026, paid in quarterly installments
- Leverage ratio of 3.15x and fixed charge coverage ratio of 2.23x, both well within MFA covenants
Financial Impact
Revenue growth of $139.4 million YoY; net income increase of $22.2 million; Adjusted EBITDA increase of $26.7 million
Risk Factors
- Brazil tax contingencies of $45.1 million and broader $447M-$491M range of reasonably possible losses
- Argentina and Venezuela currency restrictions and highly inflationary accounting treatment
- $181 million in potential income tax assessments for fiscal years 2009-2017
- Royalty rate under MFAs will increase from 6.0% to 6.25% after year 10, pressuring margins
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001628280-26-036724 |
| Document: 0001628280-26-036724-index-headers.html | 0001628280-26-036724 |
| Document: 0001628280-26-036724-index.html | 0001628280-26-036724 |
| Document: 0001628280-26-036724.txt | 0001628280-26-036724 |
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%) |
US Market Status
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