Arcos Dorados Holdings, Inc. (NYSE: ARCO) (“Arcos Dorados” or the “Company”), Latin America’s largest restaurant chain and the world’s largest McDonald’s franchisee, today reported its unaudited results for the second quarter ended June 30, 2012.
To better discern underlying business trends, this release uses non-GAAP financial measures that segregate year-over-year growth into three categories: (i) currency translation, (ii) special items and (iii) organic growth. (i) Currency translation reflects the impact on growth of the appreciation or depreciation of the local currencies in which we conduct our business against the US dollar (the currency in which our financial statements are prepared). (ii) Special items include the impact of CAD related awards and other events that management does not consider part of the underlying performance of the business. (iii) Organic growth reflects the underlying growth of the business excluding the effect from currency translation and special items. Management believes organic growth better reflects the underlying growth from the ongoing activities of our business and provides improved comparability of results.
Additionally, the Company has modified the presentation of quarterly and accumulated amounts in this release, providing an analysis by geographic division. The information presented is the same as in prior releases.
Second Quarter 2012 Highlights
- Revenues increased by 1.8% year-over-year to US$ 904.2 million or by 15.5% on an organic basis, as double digit comparable sales growth helped to offset a reduction in reported revenues from the impact of the depreciation of local currencies versus the US dollar
- Systemwide comparable sales increased by 10.4% year-over-year, driven by average check growth and increased guest counts. The result is in addition to a 14.8% increase in comparable sales in 2Q11
- 91 net new restaurants opened during the last 12 months, with an accelerated year-over-year pace in quarterly openings, which contributed US$ 40.4 million to revenues
- Adjusted EBITDA decreased by 0.9% to US$ 67.3 million, due primarily to the 23% depreciation of the Brazilian currency versus the prior year. Excluding currency translation and special items, organic Adjusted EBITDA rose 6.3% year-over-year
- Net income amounted to US$ 12.1 million, below last year’s net income of US$ 14.2 million, primarily due to the impact of currency depreciation, foreign exchange losses and a higher income tax rate