By Tess Stynes
Arcos Dorados Holdings Inc. said its first-quarter loss widened
as the world's largest franchisee of McDonald's Corp. was hurt by
impacts from weaker Latin American currencies, mainly in Brazil and
Argentina.
Buenos Aires-based Arcos Dorados's results come a day after
McDonald's unveiled plans to simplify its drive-through menu and
revamp its midprice offerings as the fast-food chain seeks to turn
around its struggling U.S. operations.
Arcos Dorados, which runs the global fast-food giant's
restaurants in Latin America, has struggled in recent quarters with
weakening economies in many of its markets. The company went public
in April 2011 amid a wave of optimism about Brazil, which accounts
for roughly half of its revenue.
Investors were enthusiastic about Arcos Dorados since its holds
exclusive rights to own and operate one of the world's most famous
brands in a region with a growing middle class. However, the end of
the commodities boom has weighed on much of Latin America's
economy.
Overall, Arcos Dorados reported a loss of $28.2 million, 13
cents a share, compared with a year-earlier loss of $20.6 million,
or 10 cents a share. The latest period included a $7.8 million
write-down of the company's assets in Venezuela.
Revenue decreased 15% to $775.1 million. Organic revenue, which
excludes items such as currency impacts, rose 10% and increased
6.8% after stripping out impacts from Venezuela.
Systemwide sales at restaurants open at least 13 months,
excluding currency fluctuations, rose 9.4%.
--Chelsey Dulaney contributed to this article.
Write to Tess Stynes at tess.stynes@wsj.com
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