Arcos Dorados Jumps on Same-Store Sales

by Alyssa Oursler | August 7, 2012 11:14 am

best stocks for 2012 logo Arcos Dorados Jumps on Same Store Sales[1]Arcos Dorados (NASDAQ:ARCO[2]) is lagging behind in InvestorPlace[3]‘s Top Stocks for 2012 [4]contest, but you wouldn’t know it after its second quarter earnings report.

Shares of ARCO saw a double-digits increase — up nearly 13% — this morning as investors jumped on news of strong same-store sales growth in Q2.

Net income decreased, though, falling to around $12 million from last year’s $14 million, while adjusted EBITDA dropped by just under a percent, coming in at $67 million. A strong U.S. dollar made for an unfavorable currency exchange for the Latin American company, as it did last quarter[5].

Revenue was hit by the same problem, but the 10% increase in same-store sales helped revenue still increase just under 2% year-over-year. Plus, the increase in same-store sales comes on the heels of 14% growth in the second quarter of last year.

On top of that, the company opened 91 new restaurants in the last 12 months, which added more than $40 million in revenue.

Still, Arcos Dorados has a long way to go to just break even for 2012. The McDonald’s (NYSE:MCD[6]) brand may be strong — one of Josh Brown’s reason for picking the stock to begin with[7] — but it hasn’t been strong enough to offset the many economic issues in ARCO’s region.

The stock is in the red over 25% since January and sits at second-to-last in the contest.

As of writing this, Alyssa Oursler did not own a position in any of the aforementioned securities.

Endnotes:
  1. [Image]: http://investorplace.com/best-stocks-for-2012/
  2. ARCO: http://studio-5.financialcontent.com/investplace/quote?Symbol=ARCO
  3. InvestorPlace: http://investorplace.com/best-stocks-for-2012/
  4. ‘s Top Stocks for 2012 : http://investorplace.com/best-stocks-for-2012/
  5. as it did last quarter: http://investorplace.com/2012/05/arcos-dorados-que-es-un-desastre/
  6. MCD: http://studio-5.financialcontent.com/investplace/quote?Symbol=MCD
  7. for picking the stock to begin with: http://investorplace.com/2011/12/arcos-dorados-mcdonalds-stock-emerging-market/

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