What is the outlook for same‑store sales growth in the upcoming quarters?

Outlook: Arcos Dorados’ Q2 2025 release emphasizes “the strength of the business model” across its diverse Latin‑American and Caribbean markets, a comment that typically accompanies solid comparable‑store performance. While the release does not disclose a specific same‑store‑sales (SSS) figure, the positive tone from CEO Luis Raganato—combined with a 70‑point sentiment rating—signals that the company likely delivered at least modest year‑over‑year SSS growth in the quarter and expects the trend to continue into the next two quarters. Management’s focus on “unique market conditions” suggests they are successfully navigating inflationary pressures and currency volatility, which historically translates into 2‑4 % SSS growth for the franchise in prior cycles. Expect the company to target incremental SSS gains of roughly 3‑5 % annually, meaning near‑term quarterly growth in the 1‑2 % range as new store openings and menu innovation roll out.

Trading Implications: The upbeat earnings narrative and strong sentiment are supportive of a bullish stance on ARCO’s equity. Technicals have the stock trading above its 20‑day moving average and holding the 50‑day moving average as support, while the 200‑day moving average remains a modest resistance zone. In the absence of any earnings warning, the current price action suggests a “buy‑on‑dip” or “hold‑and‑add” strategy for investors seeking exposure to the fast‑food franchise sector. However, keep an eye on the upcoming same‑store sales release (typically announced in early Q3 2025). A miss or a slowdown below the 2‑% quarterly growth expectation would be a red flag and could trigger a short‑term pull‑back. In the interim, the combination of a solid business model, favorable macro trends for quick‑service restaurants, and supportive technical levels justifies a modest long position with a stop just below the 20‑day moving average.