Arcos Dorados Holdings Goes Red

Arcos Dorados Holdings (NYSE: ARCO  ) reported earnings on April 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Arcos Dorados Holdings beat slightly on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share dropped significantly. GAAP earnings per share contracted to a loss.

Margins dropped across the board.

Revenue details
Arcos Dorados Holdings booked revenue of $976.9 million. The four analysts polled by S&P Capital IQ expected to see sales of $962.0 million on the same basis. GAAP reported sales were 6.0% higher than the prior-year quarter's $921.6 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 $0.04. The three earnings estimates compiled by S&P Capital IQ predicted $0.05 per share. Non-GAAP EPS of $0.04 for Q1 were 67% lower than the prior-year quarter's $0.12 per share. GAAP EPS were -$0.03 for Q1 against $0.12 per share for 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 12.3%, 230 basis points worse than the prior-year quarter. Operating margin was 3.8%, 220 basis points worse than the prior-year quarter. Net margin was -0.7%, 350 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.00 billion. On the bottom line, the average EPS estimate is $0.10.

Next year's average estimate for revenue is $4.14 billion. The average EPS estimate is $0.57.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 622 members out of 637 rating the stock outperform, and 15 members rating it underperform. Among 149 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 147 give Arcos Dorados Holdings a green thumbs-up, and two 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 $14.71.

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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. 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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