Operating margins remain highly susceptible to regional cost fluctuations, evidenced by a wide variance between the 4.2% low in 2025Q1 and the 12.3% peak in 2025Q3.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 |
|---|
| Sales/Revenue | 4.82B | 4.68B | 4.47B | 4.33B | 3.62B | 2.66B | 1.98B | 2.96B | 3.08B | 3.32B | 2.93B | 3.05B | 3.65B | 4.03B | 3.8B | 3.66B | 3.02B | 2.67B | 2.61B |
| Revenue Growth % | 7.89% | 4.66% | 3.19% | 19.7% | 36.05% | 34.05% | -32.94% | -3.98% | -7.17% | 13.35% | -4.07% | -16.39% | -9.48% | 6.21% | 3.82% | 21.19% | 13.23% | 2.25% | - |
| Cost of Goods Sold | 4.23B | 4.1B | 3.88B | 3.73B | 3.13B | 2.34B | 1.87B | 2.59B | 2.67B | 2.87B | 2.57B | 2.7B | 3.21B | 3.47B | 3.24B | 3.01B | 2.5B | 2.21B | 2.22B |
| COGS % of Revenue | - | 87.73% | 86.88% | 86.22% | 86.39% | 87.82% | 94.18% | 87.58% | 86.57% | 86.47% | 87.77% | 88.29% | 87.99% | 86.08% | 85.4% | 82.18% | 82.81% | 82.92% | 85.24% |
| Gross Profit | 588.03M | 574.12M | 586.42M | 597.14M | 492.61M | 324.06M | 115.44M | 367.54M | 413.93M | 449.02M | 358.27M | 357.53M | 438.4M | 561.34M | 554.52M | 651.73M | 518.82M | 455.2M | 384.89M |
| Gross Margin % | 12.21% | 12.27% | 13.12% | 13.78% | 13.61% | 12.18% | 5.82% | 12.42% | 13.43% | 13.53% | 12.23% | 11.71% | 12.01% | 13.92% | 14.6% | 17.82% | 17.19% | 17.08% | 14.76% |
| Gross Profit Growth % | - | -2.1% | -1.8% | 21.22% | 52.01% | 180.73% | -68.59% | -11.21% | -7.82% | 25.33% | 0.21% | -18.45% | -21.9% | 1.23% | -14.92% | 25.62% | 13.98% | 18.27% | - |
| Operating Expenses | 226.11M | 223.93M | 261.91M | 283.11M | 228.18M | 184.54M | 182.19M | 207.6M | 290.47M | 176.09M | 179.69M | 264.12M | 367.54M | 332.81M | 317.88M | 400.98M | 314.26M | 248.4M | 162.7M |
| OpEx % of Revenue | - | 4.79% | 5.86% | 6.54% | 6.31% | 6.94% | 9.18% | 7.02% | 9.43% | 5.3% | 6.14% | 8.65% | 10.07% | 8.25% | 8.37% | 10.96% | 10.41% | 9.32% | 6.24% |
| Selling, General & Admin | 316.17M | 312.75M | 279.86M | 285M | 239.26M | 210.91M | 171.38M | 212.51M | 229.32M | 244.66M | 221.07M | 270.68M | 272.06M | 317.75M | 314.62M | 386.31M | 291.8M | 231.83M | 136.6M |
| SG&A % of Revenue | - | 6.69% | 6.26% | 6.58% | 6.61% | 7.93% | 8.64% | 7.18% | 7.44% | 7.37% | 7.55% | 8.87% | 7.45% | 7.88% | 8.29% | 10.56% | 9.67% | 8.7% | 5.24% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | -2M | -88.82M | -17.95M | -1.89M | -11.08M | -26.37M | 10.81M | -4.91M | 270K | -435K | -2.36M | -627K | 146K | -848K | -2.12M | 400.98M | 314.26M | 248.4M | 26.09M |
| Operating Income | 361.92M | 350.19M | 324.51M | 314.04M | 264.42M | 139.52M | -66.75M | 159.94M | 123.46M | 272.94M | 178.58M | 93.41M | 70.86M | 228.52M | 236.64M | 250.75M | 204.56M | 206.81M | 222.19M |
| Operating Margin % | 7.51% | 7.49% | 7.26% | 7.25% | 7.31% | 5.25% | -3.36% | 5.4% | 4.01% | 8.22% | 6.1% | 3.06% | 1.94% | 5.67% | 6.23% | 6.86% | 6.78% | 7.76% | 8.52% |
| Operating Income Growth % | - | 7.91% | 3.34% | 18.76% | 89.52% | 309% | -141.74% | 29.55% | -54.77% | 52.84% | 91.18% | 31.82% | -68.99% | -3.43% | -5.63% | 22.58% | -1.09% | -6.92% | - |
| EBITDA | 567.14M | 547.45M | 501.87M | 463.31M | 384.2M | 259.91M | 60.1M | 283.15M | 229.26M | 372.32M | 271.55M | 204.12M | 187.67M | 343.38M | 328.97M | 322.57M | 267.77M | 263.11M | 271.69M |
| EBITDA Margin % | 11.77% | 11.7% | 11.23% | 10.7% | 10.62% | 9.77% | 3.03% | 9.57% | 7.44% | 11.22% | 9.27% | 6.69% | 5.14% | 8.51% | 8.66% | 8.82% | 8.87% | 9.87% | 10.42% |
| EBITDA Growth % | 17.42% | 9.08% | 8.32% | 20.59% | 47.82% | 332.47% | -78.78% | 23.51% | -38.42% | 37.11% | 33.03% | 8.77% | -45.35% | 4.38% | 1.98% | 20.46% | 1.77% | -3.16% | - |
| D&A (Non-Cash Add-back) | 205.22M | 197.26M | 177.35M | 149.27M | 119.78M | 120.39M | 126.85M | 123.22M | 105.8M | 99.38M | 92.97M | 110.72M | 116.81M | 114.86M | 92.33M | 71.82M | 63.22M | 56.3M | 49.5M |
| EBIT | 388.21M | 374.51M | 325.53M | 315.17M | 264.46M | 127.33M | -98.46M | 171.03M | 138.04M | 251.17M | 205.51M | 35.85M | -3.8M | 184.75M | 215.21M | 221.15M | 151.35M | 151.54M | 142.76M |
| Net Interest Income | -743K | -3.08M | -47.24M | -32.27M | -43.75M | -49.55M | -33.39M | -52.08M | -52.87M | -68.36M | -66.88M | -64.41M | -72.75M | -88.16M | -54.25M | -60.75M | -41.61M | -52.47M | -26.27M |
| Interest Income | 40.25M | 40.25M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 40.99M | 43.32M | 47.24M | 32.27M | 43.75M | 49.55M | 33.39M | 52.08M | 52.87M | 68.36M | 66.88M | 64.41M | 72.75M | 88.16M | 54.25M | 60.75M | 41.61M | 52.47M | 26.27M |
| Other Income/Expense | 12.85M | -8.88M | -65.23M | -35.92M | -38.03M | -61.73M | -65.1M | -40.98M | -38.29M | -90.12M | -39.95M | -121.96M | -147.41M | -131.93M | -75.68M | -90.35M | -94.81M | -107.75M | -105.71M |
| Pretax Income | 374.78M | 341.31M | 259.28M | 278.12M | 226.4M | 77.79M | -131.85M | 118.95M | 85.17M | 182.81M | 138.63M | -28.55M | -76.55M | 96.59M | 160.96M | 160.4M | 109.74M | 99.06M | 116.48M |
| Pretax Margin % | 7.78% | 7.3% | 5.8% | 6.42% | 6.26% | 2.92% | -6.65% | 4.02% | 2.76% | 5.51% | 4.73% | -0.94% | -2.1% | 2.39% | 4.24% | 4.39% | 3.64% | 3.72% | 4.47% |
| Income Tax | 140.04M | 128.73M | 109.9M | 95.7M | 85.48M | 31.93M | 17.53M | 38.84M | 48.14M | 53.31M | 59.64M | 22.82M | 32.48M | 42.72M | 46.38M | 44.6M | 3.45M | 18.71M | 12.07M |
| Effective Tax Rate % | 37.37% | 37.72% | 42.39% | 34.41% | 37.76% | 41.05% | -13.3% | 32.65% | 56.52% | 29.16% | 43.02% | -79.91% | -42.43% | 44.23% | 28.81% | 27.81% | 3.14% | 18.89% | 10.36% |
| Net Income | 234.33M | 212.12M | 148.76M | 181.27M | 140.34M | 45.49M | -149.45M | 79.9M | 36.85M | 129.17M | 78.81M | -51.63M | -109.33M | 53.85M | 114.33M | 115.53M | 106.02M | 80.02M | 103.04M |
| Net Margin % | 4.86% | 4.53% | 3.33% | 4.18% | 3.88% | 1.71% | -7.53% | 2.7% | 1.2% | 3.89% | 2.69% | -1.69% | -2.99% | 1.34% | 3.01% | 3.16% | 3.51% | 3% | 3.95% |
| Net Income Growth % | 74.64% | 42.59% | -17.94% | 29.17% | 208.54% | 130.44% | -287.06% | 116.83% | -71.47% | 63.9% | 252.63% | 52.77% | -303.02% | -52.9% | -1.04% | 8.97% | 32.49% | -22.34% | - |
| Net Income (Continuing) | 234.74M | 212.58M | 149.38M | 182.41M | 140.92M | 45.85M | -149.39M | 80.12M | 37.03M | 129.5M | 78.99M | -51.37M | -109.03M | 53.87M | 114.59M | 115.8M | 106.29M | 80.35M | 104.42M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 1.71M | 1.65M | 1.35M | 1.56M | 804K | 732K | 470K | 428K | 376K | 492K | 585K | 617K | 673K | 762K | 1.17M | 1.01M | 1.39M | 1.39M | 0 |
| EPS (Diluted) | 1.11 | 1.01 | 0.71 | 0.86 | 0.67 | 0.22 | -0.72 | 0.38 | 0.17 | 0.59 | 0.36 | -0.24 | -0.51 | 0.25 | 0.54 | 0.53 | 0.50 | 0.38 | 0.97 |
| EPS Growth % | 71.8% | 42.25% | -17.44% | 28.36% | 204.55% | 130.56% | -289.47% | 123.53% | -71.19% | 63.89% | 250% | 52.94% | -304% | -53.7% | 1.89% | 6% | 31.58% | -60.7% | - |
| EPS (Basic) | - | 1.01 | 0.71 | 0.86 | 0.67 | 0.22 | -0.73 | 0.38 | 0.17 | 0.59 | 0.36 | -0.24 | -0.51 | 0.25 | 0.54 | 0.53 | 0.50 | 0.38 | 0.84 |
| Diluted Shares Outstanding | 210.66M | 210.63M | 210.66M | 210.63M | 210.63M | 210.54M | 208.35M | 210.36M | 215.96M | 217.89M | 216.89M | 216.45M | 216.19M | 215.59M | 215.61M | 221.54M | 213.12M | 213.12M | 213.12M |
| Basic Shares Outstanding | 210.66M | 210.66M | 210.66M | 210.63M | 210.55M | 210.39M | 205.42M | 206.96M | 212.12M | 216.8M | 216.5M | 216.29M | 215.95M | 209.75M | 215.36M | 221.41M | 212.12M | 212.12M | 245.11M |
| Dividend Payout Ratio | - | 23.84% | 33.99% | 22.08% | 22.51% | 0.05% | - | 28.07% | 56.82% | - | - | - | - | 69.68% | 43.76% | 49.02% | 31.5% | - | - |
MFA Renewal and FX Volatility
According to recent financial disclosures, Arcos Dorados reported a 12.9% revenue growth in 2026Q1, yet the broader trend remains inconsistent, with quarterly growth rates fluctuating between -2.7% and 15.4% over the past ten quarters, reflecting the company's high sensitivity to regional macroeconomic conditions and currency translation impacts.
The volatility in top-line performance suggests that Arcos Dorados struggles to maintain consistent organic growth in USD terms, likely due to the hyperinflationary environments in key markets like Argentina. Investors should monitor whether the recent 12.9% uptick represents a sustainable recovery in consumer demand or merely a temporary benefit from local pricing adjustments intended to offset currency devaluation.
As reported in quarterly filings, the company maintains a gross margin profile that has hovered between 11.0% and 14.9% over the last ten periods, indicating that the mandatory royalty and rent structures inherent in the McDonald's Master Franchise Agreement create a rigid ceiling on profitability.
The narrow gross margin band suggests that Arcos Dorados possesses limited pricing power to absorb commodity cost spikes without impacting volume. This structural limitation implies that any meaningful margin expansion must be driven by operational efficiencies or digital sales penetration rather than traditional price-led margin improvement.
Based on the provided income statement data, operating margins have fluctuated significantly from a low of 4.2% in 2025Q1 to a peak of 12.3% in 2025Q3, demonstrating that the company's operating leverage is highly susceptible to the timing of non-recurring items and regional cost fluctuations.
The lack of consistent operating margin scaling suggests that SG&A expenses are not yet fully optimized to leverage the company's massive footprint. Analysts should investigate whether the periodic spikes in operating income are driven by core operational improvements or if they are distorted by the accounting treatment of lease-related adjustments and regional tax impacts.
Data from the last ten quarters indicates that net income margins have been highly volatile, ranging from 1.3% to 12.6%, which suggests that the company's bottom-line profitability is vulnerable to external shocks that the current operating model is not fully equipped to mitigate.
Short-term earnings volatility may mask underlying structural risks, particularly the looming 2027 MFA renewal which could fundamentally alter the cost-to-serve profile. Investors should be wary of the potential for margin compression if the franchisor increases royalty requirements, as the current low-margin environment leaves little room for error.
Quick answers to the most common questions about buying ARCO stock.
For fiscal year 2025, Arcos Dorados Holdings Inc. (ARCO) reported total revenue of $4.68B. This represents a 79.5% increase compared to $2.61B in 2008.
Arcos Dorados Holdings Inc. (ARCO) is profitable, generating $212.1M in net income for the fiscal year ending 2025 with a net profit margin of 4.5%.
Arcos Dorados Holdings Inc. (ARCO) reported an operating income of $350.2M, resulting in an operating profit margin of 7.5%. This margin reflects the operational efficiency of the business before interest and taxes.
Arcos Dorados Holdings Inc. (ARCO) generated $574.1M in gross profit for the year, representing a gross profit margin of 12.3%. This demonstrates the company's core pricing power and production efficiency.