Arcos Dorados Holdings Inc. announced its intent to redeem all outstanding 6.125% sustainability-linked senior notes due 2029. The company will redeem the notes at a price equal to 103.063% of the outstanding principal amount plus accrued and unpaid interest. The anticipated redemption date is July 16, 2026.

A notice of redemption will be sent to the holders of the notes in accordance with the requirements of the indenture governing the notes. The redemption price includes any Additional Amounts, if any, up to but excluding the redemption date.

Redemption Details

The following table outlines the key parameters of the redemption:

Arcos Dorados is the world’s largest independent McDonald’s franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean. It holds the exclusive right to own, operate, and grant franchises of McDonald’s restaurants in 21 Latin American and Caribbean countries and territories. The company operates more than 2,500 restaurants, employing more than 100 thousand people as of March 31, 2026.

Arcos Dorados Holdings Inc reported a 13% increase in total revenue for Q1 2026, surpassing $1.2 billion for the first time in the first quarter, driven by a 16% growth in system-wide comparable sales. The company achieved the highest adjusted EBITDA for a first quarter in US dollars at $119 million, supported by strong top-line growth and margin expansion, particularly in Brazil. Digital channels continued to gain traction, contributing 64% of system-wide sales, while the loyalty program grew to 30 million registered members.

Financial Performance

The company's financial results for the quarter reflect growth across key metrics, with adjusted EBITDA increasing nearly 30% year over year to $118 million. Consolidated margin expanded by 120 basis points, with contributions from food and paper costs as well as general and administrative (G&A) expenses. The following table outlines the primary financial highlights for the quarter:

Operational Highlights

During the quarter, Arcos Dorados added 19 new restaurants to its footprint, including 13 freestanding units, focusing on efficient capital deployment. Marketing initiatives emphasized value platforms and partnerships to drive sales, with specific strategies deployed across different regions. In Brazil, campaigns focused on core menu affordability and partnerships, while Mexico, Panama, and Costa Rica leveraged affordability platforms and localized offerings. The Southern Latin America (SLAD) division saw menu innovation as a key growth driver.

Strategic Outlook

Management expressed optimism for the second quarter, citing positive guest traffic and solid average check growth in April and the first half of May. The company remains focused on operational efficiency and cash flow generation, targeting greater shareholder value. For the 12 months ended March 31, adjusted free cash flow generation reached almost $110 million, compared to a negative $3 million in the previous period. The net debt to adjusted EBITDA ratio remained unchanged compared with year-end 2025.