What To Expect From Arcos Dorados’s (ARCO) Q1 Earnings

Fast-food chain Arcos Dorados (NYSE:ARCO) will be reporting results tomorrow morning. Here’s what to expect.

Arcos Dorados missed analysts’ revenue expectations by 2.7% last quarter, reporting revenues of $1.14 billion, down 2.7% year on year. It was a strong quarter for the company, with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ same-store sales estimates.

Is Arcos Dorados a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Arcos Dorados’s revenue to grow 3.3% year on year to $1.12 billion, slowing from the 9.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.13 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Arcos Dorados has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Arcos Dorados’s peers in the traditional fast food segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Papa John's posted flat year-on-year revenue, beating analysts’ expectations by 0.6%, and Dutch Bros reported revenues up 29.1%, topping estimates by 3%. Papa John's traded up 14.8% following the results while Dutch Bros was also up 9%.

Read our full analysis of Papa John’s results here and Dutch Bros’s results here.

There has been positive sentiment among investors in the traditional fast food segment, with share prices up 11% on average over the last month. Arcos Dorados is up 8.8% during the same time and is heading into earnings with an average analyst price target of $10.93 (compared to the current share price of $7.93).

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