Arcos Dorados Holdings Meets on Revenues, Misses on EPS

Arcos Dorados Holdings (NYSE: ARCO  ) reported earnings on Aug. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Arcos Dorados Holdings met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue improved slightly and GAAP earnings per share stayed the same.

Gross margins dropped, operating margins increased, and net margins dropped.

Revenue details
Arcos Dorados Holdings chalked up revenue of $904.2 million. The three analysts polled by S&P Capital IQ anticipated revenue of $917.7 million on the same basis. GAAP reported sales were 1.8% higher than the prior-year quarter's $888.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.06. The two earnings estimates compiled by S&P Capital IQ averaged $0.07 per share. GAAP EPS of $0.06 were the same as the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 13.3%, 170 basis points worse than the prior-year quarter. Operating margin was 4.6%, 110 basis points better than the prior-year quarter. Net margin was 1.3%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.03 billion. On the bottom line, the average EPS estimate is $0.18.

Next year's average estimate for revenue is $3.96 billion. The average EPS estimate is $0.58.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 507 members out of 519 rating the stock outperform, and 12 members rating it underperform. Among 112 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 109 give Arcos Dorados Holdings a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Arcos Dorados Holdings is hold, with an average price target of $18.21.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Arcos Dorados. Motley Fool newsletter services recommend Arcos Dorados. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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