EM LATAM CREDIT: Arcos Dorados 1Q 2025 Earnings Miss: Credit profile intact
Arcos Dorados (ARCO; Ba1/NR/BBB-)
• Latin America McDonalds franchisee Arcos Dorados reported flat sales growth and lower EBITDA, but net leverage was still comfortably low.
• EBITDA margin fell 160bps to 8.5% from 10.1% YoY with Brazil’s 440bps drop leading the way lower due to FX depreciation and higher beef and other input costs.
• Argentina and Uruguay boosted results with revenues up 20% and EBITDA up 57% YoY supported by strength in digital sales.
• Net debt rose 17% while TTM EBITDA fell 4% leading to net leverage of 1.4x, up from 1.1x last quarter.
• The company issued USD600mn new 7-year notes in January at 6.45%, about T+200bps, which were last quoted T+178bps, 26bps tighter QTD.
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MNI: CANADA FEB WHOLESALE SALES -2.7%; EX-AUTOS +1.0%
- MNI: CANADA FEB WHOLESALE SALES -2.7%; EX-AUTOS +1.0%
- FEB WHOLESALE INVENTORIES +1.6%: STATISTICS CANADA
- CANADA FEB WHOLESALES EX-PETROLEUM/OILSEED/GRAIN +0.3%
US: MNI POLITICAL RISK- Markets Interpret Tariff Delays Positively
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- President Donald Trump will host El Salvador President Nayib Bukele at the White House today for a bilateral meeting and lunch. Trump will sit down this week with the Spanish-language "Fox Noticias" program for his first post-‘Liberation Day’ interview.
- This week will again be dominated by Trump’s ambiguous trade policies. On Friday, Trump appeared to exempt some consumer electronics from all tariffs, including products from China, barring the 20% Fentanyl tariff. Yesterday, he indicated that reprieve could be short-lived.
- China has suspended exports of some rare earth minerals - crucial for the world’s car, semiconductor and aerospace industries - in retaliation for Trump’s tariffs.
- Japanese Prime Minister Shigeru Ishiba told parliament today that Japan won’t rush into striking a compromise deal with the Trump administration.
- Spanish Economy Minister Carlos Cuerpo is set to meet Treasury Secretary Bessent tomorrow amid signs Madrid is inclined to push for closer EU-China relations.
- President Trump signalled that he is likely to give Moscow more time to hammer out a ceasefire agreement with Ukraine, despite an attack on Sumy that drew widespread international condemnation.
- US and Iranian delegations are expected to meet for a second round of nuclear talks in Rome on Saturday following a satisfactory first meeting in Oman on April 12.
- Poll of the Day: Americans are increasingly downbeat about the future of the US economy.
Full Article: US DAILY BRIEF
GLOBAL POLITICAL RISK: Week Ahead 14-20 April
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(MNI) London – All timings are subject to change.
Monday 14 April:
- US-EU: European Commissioner for Trade and Economic Security Maroš Šefčovič travels to Washington, D.C., for talks with US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer. These will be the first in-person talks between the two sides since US President Donald Trump announced a 90-day pause on the ‘reciprocal’ tariffs that were set to hit the EU with a 20% levy. There remains uncertainty as to the US’ willingness to negotiate, as well as how united the EU will be in either seeking a deal with the US or risking escalation through its own retaliatory action.
