What: Shares of Acros Dorados Holdings (NYSE:ARCO) were down nearly 15% as of 12:30 p.m. Wednesday after the international McDonald's franchisee announced mixed second-quarter results and "key management changes."
So what: Quarterly revenue fell 17.3% year over year to $759 million, while adjusted earnings before interest, taxes, depreciation and amortization fell 2.2% to $41.1 million. That translated to net income of $7 million, or $0.03 per share.
Analysts, on average, were anticipating a loss of $0.05 per share, but on higher revenue of $765 million.
In addition, Arcos Dorados announced Sergio Alonso has been appointed the company's new chief executive officer, succeeding Chairman and now-former CEO Woods Staton at the helm. Staton will remain executive chairman.
Now what: "Although I am taking a step back from my day to day responsibilities," added Staton, "as Executive Chairman I will remain focused on guiding the long-term success of Arcos Dorados."
Staton also weighed in on Arcos' second-quarter results, stating, "Having presented our three-year roadmap in March, we are making solid progress on our asset monetization plans and expect to make further headway on this front in the second half of the year."
But considering that progress still couldn't live up to Wall Street's expectations, that's little solace for Arcos Dorados investors with shares now down around 30% year to date on the heels of its previous weaker-than-expected quarterly performance in May. What's more, this significant management change only adds further uncertainty to the situation. While Arcos might be headed in the right direction, that's why I'm personally content watching the stock from the sidelines.