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| Statement |
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| And in fact, we have been doing that extremely well |
| To continue strengthening our leadership in the beef segment, we launched the Bacon Cheddar McMelt sandwich and the Pileta de Cheddar in Argentina, Chile, Colombia and Ecuador with strong sales results in all four countries |
| McDonald's brand strength, structural competitive advantages and unparalleled execution continued to drive sales growth and market share gains across the Arcos Dorados footprint |
| For sure, we are very pleased with the results we published today in terms of sales growth, particularly |
| Third quarter adjusted EBITDA grew strongly in all three divisions, with double-digit growth in Brazil and NOLAD, where top-line growth drove operational leverage |
| This is where the region's largest freestanding restaurant portfolio and our 3D's strategy of Digital, Delivery and Drive-thru boost guests' value perceptions |
| Perhaps the best indicator the strategy is working is that comparable sales continued growing well above inflation across our business, with strong guest volume growth in nearly all main markets |
| Even as consumption moderated in the region, sales growth remained strong, delivering cost and expense leverage to generate improved profitability |
| [Technical Difficulty] that we are experiencing in those restaurants that are modernized and converted into the EOTF platform, typically is in the high single digits when compared to the [Technical Difficulty], that brings a pretty solid, pretty healthy return on that investment |
| First year returns on investment for new restaurants remain well above historical average, proving that penetration continues to generate demand in our region |
| New restaurants also bring significant economic benefit to the communities we serve, especially through the creation of first-time jobs and long-term career opportunities for young people |
| And it's important to mention that we expect to have a solid fourth quarter too and in that sense, to close a very, very strong 2023 |
| Beginning with the structural advantage that we have in terms of our footprint, the freestanding restaurants, the amount of freestanding restaurant that we have is a huge advantage |
| our robust digital platform |
| dollar EBITDA growth was driven mainly by higher sales, but we also managed to expand margins, thanks to better food and paper costs and some fixed cost leverage in the quarter |
| Net income of $59.7 million, or $0.28 per share, rose 27.4% over last year's strong results |
| Digital sales this last quarter were up 47% and reached more than $731 million, that this is a new quarterly record |
| And also keep in mind that in SLAD at the restaurant level, which includes food and paper, payroll, other operating expenses and royalties, we are seeing an expansion in margins of 120 basis points during the quarter |
| The outlook we have for margins we have seen actually in this quarter an improvement in food and paper costs of 90 basis points |
| Delivery has proved to be a remarkably consistent sales channel with a 48% increase in local currency sales over the prior year |
| And Drive-thru sales rose 17% in local currency, complementing the strong rebound in on-premise sales channels |
| So, we are very pleased with the kind of results that our new restaurants are generating from day one |
| So, we are pretty convinced that we will do well for the rest of the year and next year, too |
| Remarkably, guest volume rose mid-single digits, building on last year's strong results despite a more challenging consumption environment |
| That's why not only comparable sales results are very strong, but the McDonald's brand strength is at an all-time high in the region |
| And in the second part of the question, as I mentioned, I think in the first question that came from Thiago, we are very pleased with the trends and the momentum we are experiencing in terms of sales |
| Delivery sales also remained strong in the Brazilian market, rising 32% versus last year in local currency |
| As we open even more freestanding units, modernize even more existing restaurants and develop even more digital capabilities, we are strengthening and expanding the structural competitive advantages that make McDonald's by far the preferred brand in the Latin American QSR industry |
| So our plan is clear, is to continue to drive sustainable sales growth and in that way, generate operating leverage and improve long-term profitability, and we are pretty confident in our ability to continue capturing opportunities to sustain strong operating results since none of the current growth drivers are short term |
| But we did well even in shopping malls, particularly in July, the traffic generated by Cinemas was pretty impressive, and we did well in shopping malls, too |
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| While your competitors continue to note a weak consumption backdrop, not just in burger but across multiple QSR categories |
| Additionally, a combination of items in other operating expenses this year compared to other operating income last year, generated a negative variance in SLAD's EBITDA margin |
| The base of comparison is getting harder and harder to beat because we are in a run of several quarters of expressive and material comparable sales growth, well above inflation |
| "You mentioned some pressure on rents in Brazil despite the negative IGPM index |
| Most other expense line items were relatively flat versus the prior year, except for other operating expenses, which had a negative variance due to several puts and takes, primarily in SLAD |
| I understand comps are harder in the fourth quarter of '23 |
| In Mexico, in the last three years, in fact, we have seen payroll pressures having salaries growing well above inflation |
| And we did this despite a very important recuperation in front counter and dessert centers in both restaurant formats, freestanding and front counters -- and food courts, I'm sorry |
| "Could you please explore a bit more the SLAD EBITDA margin drop due to higher other operating expenses and higher G&A? What are the main drivers of higher expenses? And should we expect continuous deterioration of expenses in SLAD?" Mariano Tannenbaum Yes |
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