ARCO Gears Up for Q1 Earnings: What's in the Offing for the Stock?

Arcos Dorados Holdings Inc. ARCO is scheduled to report first-quarter 2025 results on May 14, 2025. In the preceding quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 27.3%.

ARCO’s Q1 Estimates

The Zacks Consensus Estimate for earnings is pegged at 13 cents per share, down 7.1% year over year. In the past 30 days, earnings estimates for the current quarter have remained stable. The consensus mark for revenues is pegged at $1.07 billion, down 1.3% year over year.

Factors to Note Ahead of ARCO’s Q1 Release

Arcos Dorados’ first-quarter 2025 results are likely to be hurt by macroeconomic headwinds and shifts in consumer sentiment. It anticipates comparable sales growth in the first quarter to have been soft, owing to transitory challenges that have been broadly affecting consumer-facing businesses in Latin America.

One of the factors contributing to this expected softness is the comparison against a leap year, which has created a tougher year-over-year benchmark. Additionally, weaker currency levels in many of the company’s core markets are expected to have weighed on the quarter’s performance.

On the other hand, high costs are likely to have hurt the bottom line. ARCO continues to invest in its digital and IT infrastructure, including restaurant-level digital tools, which is likely to have increased operational expenses. These investments aim to improve long-term efficiency and customer experience but might have increased short-term costs.

What Our Model Says About ARCO

Our proven model does not conclusively predict an earnings beat for Arcos Dorados this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

ARCO’s Earnings ESP: Arcos Dorados has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank of ARCO: Arcos Dorados currently carries a Zacks Rank #3 (Hold).

Stocks With the Favorable Combination

Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Monster Beverage MNST currently has an Earnings ESP of +0.54% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is expected to register growth in both top and bottom lines when it reports first-quarter 2025 results. The Zacks Consensus Estimate for MNST’s quarterly earnings has been stable in the past 30 days at 46 cents per share, indicating 9.5% growth from the year-ago quarter's number. The consensus estimate for Monster Beverage’s quarterly revenues is pegged at almost $2 billion, implying a rise of 3.7% from the figure reported in the prior-year quarter. MNST reported a negative earnings surprise of 5.8%, on average, in the trailing four quarters.
 
Dollar General Corporation DG currently has an Earnings ESP of +4.30% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter fiscal 2025 earnings per share is pegged at $1.46, implying an 11.5% year-over-year decline.

Dollar General’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $10.26 billion, which indicates an increase of 3.5% from the figure reported in the prior-year quarter. DG delivered a trailing four-quarter earnings surprise of 1.2%, on average.

Casey's General Stores, Inc. CASY currently has an Earnings ESP of +5.05% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 earnings per share is pegged at $1.93, calling for a 17.5% year-over-year decline.

Casey's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.97 billion, which indicates an increase of 10.3% from the figure reported in the prior-year quarter. CASY delivered a trailing four-quarter earnings surprise of 22.7%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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