Arcos Dorados Reports Strong Comparable Sales for the Fourth Quarter 2023 and Provides Guidance for 2024

Arcos Dorados Holdings, Inc. (NYSE: ARCO), Latin America’s largest restaurant chain and the world’s largest independent McDonald’s franchisee, today reported its systemwide comparable sales growth for the fourth quarter and full year ended December 31, 2023, ahead of its quarterly earnings announcement planned for March 2024. The Company also provided guidance for restaurant openings and total capital expenditures for 2024.

“We had a solid finish to a very strong year. Our Three D’s Strategy of Digital, Delivery and Drive-thru continues to evolve and leverages the Latin American quick service restaurant industry’s largest free-standing restaurant portfolio. Digital channels drove sales growth all year and represented 53% of Arcos Dorados’ systemwide sales in the fourth quarter. Our mobile app has evolved into an e-commerce platform. It allows us to engage with guests to learn their consumption preferences and provide the most compelling value, experience and convenience in the industry. The result was an increase in visit frequency and market share gains across our markets. Growth in Loyalty Program membership, which exceeded three million members at the end of 2023, is just the latest indicator that guests are ‘Lovin’ It’ when it comes to the McDonald’s experience in Latin America and the Caribbean,” said Marcelo Rabach, Arcos Dorados’ Chief Executive Officer.

“We opened more than 80 restaurants last year, remaining focused on free-standing unit openings. This continues to be a structural competitive advantage given the greater adaptability of this restaurant format, compared with the competition’s mostly mall-based restaurant portfolios. The openings pipeline remains robust and we are increasing the number of annual openings to capture the full potential of the McDonald’s Brand in our region.”

¹Revenue refers to unaudited, estimated results as of the time of this press release.

Systemwide Comparable Sales Growth

Fourth quarter systemwide comparable sales grew solidly on top of very strong results in the prior year period. In Brazil, October sales faced a challenging comparison but rebounded strongly in November and December with double-digit comparable sales growth. NOLAD saw strong results, especially in Mexico and the French West Indies, partially offset by the impact of social unrest in Panama during the quarter. SLAD’s markets performed strongly in the quarter as well. Digital rose nearly 65% in constant currency, including around 50% higher Delivery sales in the quarter. Identifiable sales were 21% of sales in the quarter with the Loyalty Program surpassing 3 million members at year end.

2023 Actual and 2024 Guidance – Openings and Capital Expenditures

Openings and Modernizations

The Company opened 81 Experience of the Future (EOTF) restaurants in 2023, including 72 free-standing units. There were 50 openings in Brazil and an even number of openings between NOLAD and SLAD.

For 2024, the Company expects to open 80 to 90 EOTF restaurants, comprised of about 90% free-standing units.

Capital Expenditures

Total capital expenditures in 2023² were approximately in line with guidance of $350 million, including all openings, modernizations, optimizations and maintenance in the restaurant portfolio as well as the Company’s investments in its Digital platform and back-office systems.

For 2024, the Company projects total capital expenditures of $300 million to $350 million, which it expects to fund with cash on hand and cash generated from operations.

²Total capital expenditures in 2023 refer to unaudited, estimated results as of the time of this press release.