Fast-food chain Arcos Dorados (NYSE:ARCO) reported results in line with analysts' expectations in Q4 FY2023, with revenue up 15.4% year on year to $1.18 billion. Its GAAP profit of $0.26 per share was flat year on year.

Is now the time to buy Arcos Dorados? Find out by accessing our full research report, it's free.

Arcos Dorados (ARCO) Q4 FY2023 Highlights:

• Revenue: $1.18 billion vs analyst estimates of $1.17 billion (small beat)

• EPS: $0.26 vs analyst estimates of $0.25 (2.2% beat)

• Gross Margin (GAAP): 14.1%, down from 14.9% in the same quarter last year

• Same-Store Sales were up 32.4% year on year

• Store Locations: 2,361 at quarter end, increasing by 49 over the last 12 months

• Market Capitalization: $2.52 billion

Translating to “Golden Arches” in Spanish, Arcos Dorados (NYSE:ARCO) is the master franchisee of the McDonald's brand in Latin America and the Caribbean, responsible for its operations and growth in over 20 countries.

Traditional Fast Food

Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.

Sales Growth

Arcos Dorados is one of the larger restaurant chains in the industry and benefits from a strong brand, giving it customer mindshare and influence over purchasing decisions.

As you can see below, the company's annualized revenue growth rate of 10% over the last four years (we compare to 2019 to normalize for COVID-19 impacts) was decent as it opened new restaurants and grew sales at existing, established dining locations.

This quarter, Arcos Dorados's year-on-year revenue growth clocked in at 15.4%, and its $1.18 billion in revenue was in line with Wall Street's estimates.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.

Same-Store Sales

Same-store sales growth is a key performance indicator used to measure organic growth and demand for restaurants.