Arcos Dorados Holdings (AD8) Q2 2026 Earnings Report

The call conveyed a predominantly positive message: the company delivered record revenue, adjusted EBITDA, net income and EPS growth, meaningful digital and market-share gains, strong Brazil outperformance, improved leverage (1.1x) and successful capital actions (sustainability-linked bond, note repayment). Headwinds remain—consumer pressure in parts of the footprint (Argentina, Mexico), NOLAD comparability and payroll cost pressure, earthquake disruptions, and an aggressive promotional environment—but management framed these as largely manageable and supported by ongoing revenue management, cost discipline, and operational initiatives. Overall the positive operational and financial momentum outweighs the listed challenges.

Management said that while conditions will remain dynamic in H2 2026, they expect to maximize full‑year results and strengthen the growth foundation, leveraging Q2 momentum—total revenue of $1.3B (+~14% y/y), adjusted EBITDA of $126.8M (>20% y/y), Brazil EBITDA up ~43% with a 180‑bp margin expansion to 14.6%—and improved cash and leverage (TTM net leverage ~1.1x and sequentially higher adjusted free cash flow). They expect G&A savings to continue through year‑end and further margin support from food & paper improvements, a lower consolidated effective tax rate over time, and continued operational drivers including digital sales +25% y/y (66% of sales), identified sales >28%, loyalty members who visit ~5x more, 16 restaurant openings in Q2 (35 YTD), Q2 CapEx $49.1M (YTD ≈$86M) and ~77% of the portfolio modernized; more detail will be provided at Investor Day on October 1.