Episode Details

Arcos Dorados Q1 2026 earnings breakdown - conversational walkthrough with a price-aware verdict and Wall Street consensus comparison. THE CALL: BUY (4/5 conviction, STRONG) - CURRENT @ $9.16 - same - BUY below $8.50 with $7.50 stop - AVOID above $11.50 TRIGGER: Watch for Q2 systemwide comps holding above +5% and BRL stability — those two together would justify a re-rating above $11.50. WINDOW: 12-18 months. TRACKER: charged-alpha.com/calls/ARCO WALL STREET CONSENSUS - Ratings: 0 Strong Buy / 7 Buy / 2 Hold / 0 Sell / 0 Strong Sell - BUY - Median 12-month price target: $11.53 (range $9 - $14) - Charged Alpha vs consensus: Charged Alpha call is broadly in line with consensus. THESIS ARCO is the cheapest scaled QSR operator in the world at 0.8x EV/Sales, growing revenue ~10% with 30%+ ROE — the gap to McDonald's eight-turn multiple is too wide given the structural growth runway in LATAM. Bull lever: If systemwide comps stay above +5% and BRL holds, FY26 EPS lands above $0.75 and the stock re-rates to 1.2x EV/Sales — a clear path to $13-14. Key risk: BRL/USD is the swing variable — a 15% BRL devaluation would erase nearly all the revenue beat in USD terms even if local-currency operations stay strong. QUALITY CHECK - Management quality grade: B+ (Marcelo Rabach has led ARCO since 2019 and built a deep operating bench. Disciplined capital allocation through multiple FX crises; dividend reinstated 2024 and growing.) - Earnings quality grade: B (Cash conversion is decent on a TTM basis; the GAAP vs adjusted gap is narrow; SBC is immaterial. The main quality flag is FX translation noise, not earnings management.) CHAPTERS 0:00 Hook 0:32 The Print 1:38 The Trend 2:30 The Segments 3:15 The FCF Bridge 4:02 Guidance & The Narrative Diff 5:00 Peer Dot-Plot 5:41 Management & Earnings Quality 7:06 S8_Call KEY METRICS - Q1 2026 - Revenue: $1,216M (+12.93% YoY, +3.05% vs est) - EPS GAAP: $0.17 (vs $0.14 est, +21.4% beat; +157% YoY) - Gross margin: 10.99% - Operating margin: 4.68% - FCF margin: slightly negative Q1 (capex-heavy year) - Systemwide comps: +7.4% all divisions - EV/Sales: ~0.8x vs MCD ~8x SEGMENT HIGHLIGHTS - Brazil (largest): comps positive, traffic up - Caribbean: comps accelerating - South Cone: Argentina/Chile/Peru growing - Digital orders and delivery: 30%+ of mix GUIDANCE - FY26 guide raised; revenue and EPS above consensus - Capex for digital kiosks and store remodels continuing DATA SOURCES - FMP (financialmodelingprep.com) - Arcos Dorados Q1 2026 Earnings Release (2026-05-20) DISCLAIMER This is for informational and entertainment purposes only. Not financial advice. Charged Alpha does not have a position in ARCO. Do your own research before any investment decision. #ARCO #ArcosDorados #McDonalds #LATAM #Brazil #QSR #earnings #investing #ChargedAlpha