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Operator
Good morning, everyone, and thank you for joining our second quarter 2023 earnings webcast. With us today are Marcelo Raba, our Chief Executive Officer, Luis Raganato, our Chief Operating Officer, and Mariano Tannenbaum, our Chief Financial Officer. Today's webcast, which is being recorded, will consist of prepared remarks from our leadership team, which will be accompanied by a slide presentation, also available in the investor section of our website, www.arcosdorados.com.ir. As a reminder, to better review the presentation on the webcast platform, please scroll over the upper left-hand part of the screen and click on the arrows to maximize the slides. After we conclude our opening remarks, we will answer your questions, which you can submit using the chat function on the left-hand side of the screen. You will need to minimize the slides to access the chat function. Today's call will contain forward-looking statements, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. In addition to reporting financial results in accordance with generally accepted accounting principles, we report certain non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial results as compared with GAAP results, which can be found in the press release and unaudited financial statements filed today with the SEC on Form 6-K. Marcelo, over to you.
Luis Raganato
Thank you, Dan. Good morning, everyone, and thank you for joining us today. For the last several years, Arcos Dorados has capitalized on its unique position in the Latin American QSR industry. We operate the industry's favorite brand and benefit from structural competitive advantages that position us to sustain recent trends for years to come as we capture the McDonald's brand full growth potential. By consistently executing our 3D strategy of digital delivery and drive-through, we are generating strong sales growth. Restaurant volumes continue to increase, largely because we offer guests an unmatched combination of quality, value, and convenience. This has led to sales growth well above inflation that in turn helps us leverage our fixed costs and sustainably grow our EBITDA in US dollars. We are also deploying capital better than ever, generating above average returns on restaurant openings. Importantly, these investments provide more than just financial returns. They also make us the largest generators of first-time job opportunities for young people in the region. These first-time jobs can lead to long-term opportunities, as they did for me and for so many other people across Arcos Dorados who began their careers in one of our restaurants. I hope we can inspire even more young people to join the Arcos Dorados family and build a better future for their families, communities, and the planet. Let's take a look at the consolidated results for the second quarter of 2023. You will see that the strong trends of the last several quarters continued into the second quarter of this year. Total revenue surpassed $1 billion for the first time in the second quarter, rising 17.2% in U.S. dollars versus the prior year period. This included gas traffic growth in the mid-single digits in all three divisions. even though last year's numbers were also very strong. Consistent with recent quarters, above-inflation top-line growth drove operating leverage and improved profitability. Adjusted EBITDA was up 20.5% in the quarter, with 30 basis points of margin expansion. Net income was also strong, nearly doubling last year's results. System-wide comparable sales grew 31.5%, or about 1.3 times blended inflation across the company. With traffic continuing to grow, we increased the visit share gap versus our closest competitors in our main markets. This is among our core goals. Continue to grow comparable sales above inflation in each market, gain market share, and leverage fixed costs to drive sustainable cash flow generation. Perhaps the most important key to our success has been the 3D strategy. Digital sales accounted for 49% of system-wide sales, with 20% identified sales across the business. Delivery continues to be an important sales driver as it captures a bigger and bigger share of the overall market. and drive-through sales have established a new baseline, even though growth has moderated, with guests returning to restaurant dining rooms. Finally, as we mentioned on our last call, we expect restaurant openings and modernizations to be back in waiting in 2023. For the year to date through June, we opened 18 restaurants, including 16 freestanding units. openings are beginning to accelerate. In fact, since the beginning of July, we have opened an additional 12 restaurants, and we have already made all the ground breaks required to meet our openings guidance for the full year 2023. We are expanding our footprint in a vastly under-penetrated region, which gives us confidence in our pipeline, and we expect these new locations to continue generating above average first-year returns on investment. I will turn it over to Luis now for an overview of sales performance in each division.
Dan
Thanks, Marcelo, and good morning, everyone. System-wide comparable sales growth remains strong across the board in the second quarter, with all divisions growing well above inflation. Over the last few years, we pursued a competitive marketing strategy avoiding the temptation to use price increases as the main tool to offset higher costs. We have learned from experience that while aggressive price increases can bring a short-term margin benefit, they can also have a long-lasting negative impact on guest volumes. Instead, by offering compelling value, unmatched quality, and great service, we have sustained volume growth and driven guest frequency. Soon we will further boost guest loyalty with a nationwide rollout of our loyalty program in Brazil and all other markets in the next couple of years. Taking a closer look at each division, Brazil's comparable sales rose 2.5 times inflation in the quarter. Guest volume was up in the mid-single digits, despite a very strong performance in the prior year quarter. Digital penetration continues to rise in Brazil. The Maky Fest campaign that provided guests with a festival of offers helped drive 26% growth in digital sales by encouraging consumers to download and use the mobile app. Digital sales are now responsible for 61% of total sales in the country, including 25% identified sales the highest penetration for both indicators across all markets. McDonald's brand market share remained very strong in the Brazilian QSR market during the second quarter and is more than two times the share of the nearest competitor. According to our internal research, brand health is at an all-time high with a top of mind score three times higher than the closest competitor. We also have some exciting news during the quarter with the addition of the big tasty bacon barbecue to the premium beef segment. Chicken sales are growing strongly across the region, adding even more relevance to this important category with great menu offerings and dedicated marketing campaigns, such as the celebration of the Chicken McNuggets 40th anniversary in all Arcos Dorados markets. Nolad's comparable sales grew 2.8 times the division's blended inflation in the quarter. Volume growth was robust across Nolad, with particularly strong volume growth in Mexico, where almost double-digit volume growth helped drive 16% higher comparable sales. Nolad's markets also captured market share in the quarter and have seen consistent positive momentum in brand attributes across the division. We expect to boost this momentum with a continued rollout of the Best Burger platform. In April, Puerto Rico became the latest Arcos Dorados market to implement Best Burger, with sales responding strongly in May and June. Digital sales are growing in NOLA, and we believe it is a matter of time before the division increases digital sales penetration to be more in line with the company average. SLAT's comparable sales grew 1.2 times the division's blended inflation rate. Inflation-aided growth in Argentina was complemented by comp sales growth of 19% and 25% in Colombia and Chile, respectively, thanks to strong volume performance in both markets. Slat's story in the second quarter was similar to the other two divisions, touching record market shares division and continuing its very positive brand attribute trends. Innovation in the beef and chicken platforms helped drive sales with introduction of new sandwiches in Chile, Argentina, and Colombia. Slat's digital sales penetration and identified sales were the highest ever in the quarter, supported by strong performance in key digital channels like mobile order and pay, which is generating robust growth across the entire region. Looking ahead, economists are calling for softer consumption in some of our main markets, and we are keeping an eye on macroeconomic pressures as well as political developments across the region. While this could cause consumption to soften and sales growth to moderate in the second half of 2023, we remain confident in our strategy. All restaurant formats are generating strong sales growth, and we are laser focused on growing sales above inflation, increasing operational efficiency, and delivering the best guest experience in the industry. This has always been the most successful combination and we expect to keep it up for many more years. Before I turn it over to Mariano, I'd like to share some great news. Our brand marketing campaigns recently received recognition on the world's biggest stage. In June, McDonald's earned an impressive 18 Lions across 10 markets at the Cannes Lions International Festival of Creativity. We're very proud to say that this included five lions from three Alcoderados markets. Over to you, Manero.
Marcelo
Thanks, Luis. Good morning, everyone. Adjusted EBITDA grew 20.5% in US dollars in the quarter, or 16.1%, excluding the $4 million gain from the sale of restaurants to sub-franchisees in Chile. This is a testament to the strength of our strategy to sustainably improve profitability through top-line growth. Consolidated margin improved by 30 basis points versus the second quarter of last year, with efficiencies in all restaurant-level expense items except royalties. This is the last full quarter to be impacted by the final step up of our royalty rate, which became effective on August 3rd Food and paper costs were relatively flat as a percentage of revenues versus 2022, as we used reduced input costs to our advantage in a softer consumer environment. As Luis mentioned, this helped sustain guest traffic growth in our restaurants. G&A was higher as a percentage of revenue, primarily due to higher stock-based compensation expenses given the strong performance of our stock price. With that said, we expect G&A to remain relatively flat as a percentage of revenue for the full year 2023. Strong operating results in the second quarter contributed to net income and earnings per share growth, which almost doubled versus last year. Second quarter adjusted EBITDA grew by double digits in all three divisions with especially strong performances in Brazil and NOLA, where top-line growth drove operational leverage. Margin expansion was robust in Brazil, rising 230 basis points versus the prior year with significant operational efficiencies, more than offsetting a minor food and paper cost increase. NOLAD and SLAD managed to offset most of the royalty pressure with margin contraction of just 20 and 40 basis points respectively. NOLAD also continues to benefit from the strong Mexican peso on both its cost structure and translation into US dollars.
Dan
Marcelo already mentioned that a key element of our success over the last few years has been the 3D strategy of digital, delivery, and drive-through. Digital, which includes sales from delivery, the mobile app, and self-order kiosks, increased its penetration to nearly half of all McDonald's brand sales in our footprint. Identified sales are increasing consistently as we make progress toward the goal of identifying at least 40% of sales by the end of 2025. we reached other important milestones in the quarter as well. Our mobile app has now been downloaded over 100 million times. We have well over 70 million unique registered users in our database and more than 16 million average monthly users of our mobile app. According to public sources of information in Brazil, we have around three times as many active users as our nearest competitor. Brazil's results also demonstrate the potential of the experience of the future modernizations. With EOTF locations accounting for about three-quarters of its restaurants, self-ordered kiosks, which generate a higher average and better profit margins, are now the largest sales channel in the country. We continue to leverage the industry's largest freestanding restaurant portfolio in the second quarter, with sustained growth in both delivery and drive-thru sales, even with constant currency increases of 37% and 31% in front counter and dessert centers, respectively. In fact, thanks to a longstanding strategic decision to expand the brand with a balanced restaurant portfolio, we now have Latin America's largest delivery sales and account for more than half the region's total drive-through industry. Strong execution is an important reason we are successfully capitalizing on changed consumer behavior and meeting guests' desire for convenience and choice when it comes to enjoying their McDonald's experience.
Marcelo
We know there is still a long runway in terms of restaurant growth potential. To support that growth, we are maximizing our EBITDA generation while maintaining a strong balance sheet. The net leverage ratio at the end of June was a very healthy 1.1 times as EBITDA growth is helping offset the planned deployment of balance sheet cash to fund our expansion plan this year. The modest increase in total debt so far this year relates to the appreciation of the Brazilian real, which reduced the value of our currency hedges. In line with my comments on our last call, cash flow from operations was relatively low during the first half of the year due to the seasonality of our working capital needs. We expect cash flow from operations to increase sequentially in the second half of the year with seasonally higher EBITDA and an improvement in working capital performance, especially during the fourth quarter. Almost half of all our Cosberados restaurants have been modernized to EOTF, and we expect to exceed 90% modernized by year-end 2027. We opened 10 restaurants, including eight freestanding units in the second quarter. Capital expenditures were $76 million in the second quarter as we ramped up openings modernizations, and other investments to meet our full-year targets. Marcelo, back to you.
Luis Raganato
Thanks, Mariano. Let's take a look at some of the recent milestones from our Recipe for the Future ESG platform. A consistent theme across all our investments in ESG initiatives is diversity and inclusion. We foster a diverse workplace where 58% of employees identify as women. And including young people in the formal workforce is part of what we do, which is why we began offering free online certificate courses to help young people improve their personal and professional lives. I am proud to announce we recently surpassed 110,000 people enrolled in these free MacCampus courses. Perhaps this is one of the reasons Merco recently named Arcos Dorados the most socially responsible restaurant company in Brazil. We are also making progress on some of our other commitments, such as selling 100% cage-free eggs across our entire operation by the end of 2025. We have already completed the transition in Brazil, Colombia, Costa Rica, and Peru. Our investments support growth opportunities for our employees, economic and social development in our communities, and initiatives to protect the planet for future generations. As our business grows, we will continue to make these investments to benefit all our stakeholders. To wrap up our prepared remarks, I would like to share a few final thoughts with you. We are very pleased with our performance so far in 2023, given how resilient sales growth has been, even with signs of a softening consumer environment. This is a testament to the long-term strategic approach we have always taken to growing the McDonald's brand in Latin America and the Caribbean. We believe the strategy is sound and our execution is second to none, which is why we are confident in our ability to keep growing profitably in the long term. The business is benefiting from the diversification of our geographic footprint like never before. Brazil remains our largest market, but the gap that once existed between our top and bottom performers is shrinking. NOLAD's results are improving steadily, generating significant hard currency cash flows that improve the company's overall financial strength. And SLAD has been resilient despite all the macroeconomic challenges that have impacted the division for more than a decade. We are working hard across all markets and business segments with long-term objectives designed to create value for all stakeholders for many years to come. Thank you all for your continuing support. Dan, over to you to start the Q&A session. Thanks, Marcelo.
Operator
In order to get started, please minimize the presentation slides so that you can access the chat function on the left-hand side of the webcast platform. Please limit yourself to one or two questions so that I can read, understand, and convey them to our speakers. We will now pause briefly to compile your questions. Okay, so our first question, or actually set of questions, come from Bob Ford of Bank of America, and I'm going to take them sort of one at a time. Bob says, congratulations on the quarter, and thanks for taking my questions. And the first one is, can you provide some additional detail on the re-franchising in Chile? So Marcelo, I'll start with you. Excellent.
Luis Raganato
Good morning, Bob, and thanks for the questions. Well, the four million gain in the period relates to the sale of two restaurants to a sub-franchisee in the northern part of Chile in exchange for cash and one restaurant that at the time he was operating in Santiago, the capital of the country. Selling or buying some restaurants to sub-franchisees is a normal part of our business. that we are highlighting in this quarter, because it has a material impact in the period's results. Importantly, and from a strategic standpoint, these transactions, and this transaction particularly, allows us to continue concentrating our own operation, our co-operation in larger cities, with our sub-franchises operating in smaller or more remote geographies, which is the case of this transaction.
Operator
And Bob's follow-up to that question, Marcelo, is how many units were sold and were there any other closures or other disposals in SLAD?
Luis Raganato
This transaction involved two restaurants that were sold and one that was buying. And we only closed three restaurants in SLAD during this quarter. And those three restaurants were in Venezuela.
Operator
Great. He continues then with, also, can you touch on the underlying margin pressure and operating challenges in the region, which I assume, Bob, you're talking about SLAD. And I'll give that one to you, Mariano.
Marcelo
Perfect. Thank you very much. Good morning, everybody, and thanks, Bob, for the question. Even though we see some challenging macro environment in some countries in SLAD, system-wide sales comps grew 1.2 times inflation, which is aligned with our strategy of growing sales above inflation to gain margin leverage. The EBITDA grew 12% in dollar terms. And in the different lines of the P&L, what we are seeing is, first of all, we're very happy with the leverage we are seeing in gross margin, which in SLAT is improving. And take into account that SLAT is taking the full impact of increasing royalties compared with last year of 100 basis points. So even though there's a margin Of 40 basis points, we are comparing with 100 basis points of the increase in the royalty rate.
Operator
Perfect. And then Bob wraps up with a question related to the effective tax rate. Similar questions, by the way, from Antonio Hernandez from Barclays, Ulises Argote from JP Morgan, and Joaquin Ley from Itaú. Bob's question, which is repeated, as I mentioned, There was a spike in the effective tax rate. What was behind that, and how should we think about taxes over the balance of this year and into 2024? Thank you. Perfect. I'll take that one.
Marcelo
Well, on a quarterly basis, as we already mentioned, the effective tax rate is somewhat volatile. given the various rules governing the calculation of this liability in each of our markets. We are operating in 20 markets with 20 different tax rules, as well as within our holding company structure. So, when the second quarter is correct of 2023, we had a higher tax rate than last year. If you consider the first half of 2023, compared with the first half of 2022, the effective tax rates are quite similar, 47.5 versus 45.6 on 2022. For the full year in 2023, we expect the effective tax rate to be slightly higher than normal in the previous years because of several impacts, higher withholding taxes in our corporate structure, Also, lower usage of net operating losses from prior periods that is aligned with the EBITDA growth that we are seeing in several of our markets. Somehow greater non-deductible expenses in certain markets compared to previous year. And additionally, inflation and other adjustments related to the macro environment in Argentina. Finally, we are not seeing at this moment an impact from the tax reforms, but we are hearing about different projects in different markets that we cannot measure yet, but could have an impact going forward. So looking ahead, we believe that 35 to 40% is a reasonable level to expect on a full year basis, same for 2024. Perfect. Thanks, Mariano.
Operator
The next question comes from Thiago Bortolucci of Goldman Sachs. Morning, Marcelo, Dan, and Team Marcos. Congrats on another solid print. And Thiago sends us four questions, so we're going to work through these as well. Brazil's same-store sales. Is it possible to comment on traffic versus price and how the performance evolved monthly over the course of the quarter and how do we see our prices versus competition? I think all three of those. I'll start with you, Luis.
Dan
All right. Thank you, Dan. Good morning, everyone. And thank you, Thiago, for the question. Brazil's traffic was up mid-single digits and the rest of the growth came from higher average check. And about the monthly evolution of the performance of the country, we had challenging comps in April of last year and strong in May and June. And in general, competition remained rational during the second quarter. Although in some markets like in Brazil, we have seen increased promotional activity. With that said, our volume and sales trends remain strong and we continue shielding or gaining even market share. And our strategy will continue to be focusing in a responsible pricing policy, offering compelling value and to deliver the best experience to our guests. Yeah.
Operator
Great. Thiago's second question relates to market share. Luis, this one will be for you as well. Can you elaborate on where is the average market share in Brazil and how it compares to our market share within delivery? All right.
Dan
I will start with the general context. Our comparable sales grew 31.5% or about 1.3 times blended inflation across the company. in this second quarter. Only in Brazil, this growth was 2.5 times inflation. And this strong comparable sales growth in many of our markets supported positive market share trends. So according to Crest in Brazil, we increased visit share by 1.6 percentage points in the last 12 months. Today in this country, our share more than doubles the share of our main competitor, And according to internal research, the visit share gap remained very strong across the region. For example, the visit share was three times higher than our nearest competitor in Argentina and Chile, two times higher in Mexico and Colombia. And specifically about delivery in Brazil, and this is based on public information also, our gap in sales is 3.5 times compared with our main competitor. Yeah, great.
Operator
Thanks, Luis. Jaguar's third question. He says that some of our competitors called on a challenging industry, mentioning short-term growth will likely be driven by efficiency rather than demand. And he asks if we're saying the same. And we'll pass that one to you, Marcelo.
Luis Raganato
Okay, thank you. No, absolutely not. We are very pleased. with how the year is developing. We've seen strong sales growth in the first half in all three divisions, and particularly in Brazil with 2.5 times our system-wide comparable sales on top of inflation. And importantly, we continue to see solid sales trends in the third quarter as well, with system-wide comparable sales growing well above inflation in all the three divisions. I think that the McDonald's brand in our region, in Brazil and the rest of the markets, is now positioned in a way that it should perform well in good macroeconomic times and in more challenging environments. Unfortunately, the structural advantages of our freestanding footprint, freestanding restaurants, the strong performance across the three Ds, and a prudent competitive pricing strategy are driving sustained sales growth all across the region, even in the current environment. So we still see, we are very confident on our ability to continue to grow sales above inflation and having growth in our profitability coming from volumes, additional traffic and additional average check.
Operator
Perfect. Thanks, Marcelo. And Thiago's last question, this one will be for you, Mariano. If we can have any quantification on how the Argentine peso devaluation could impact our EBITDA. Perfect. Thanks, Thiago, for the question.
Marcelo
Devaluation of the Argentine peso reduces the country's U.S. dollar contribution to consolidated revenue and EBITDA. But the impact of EBITDA as well is partially offset by a reduction of corporate GNA expenses, also denominated in Argentine pesos. With what we know today, with the announcement made so far, this week's devaluation of the Argentine peso will not significantly impact consolidated EBITDA in the second half of the year from a pure effects perspective. Having said that, we need to be prudent to see how these measures will affect consumption in the remaining part of the year. But from a pure effects and evaluation perspective, that was the question. We are not seeing a significant impact on consolidated EBITDA.
Operator
Great. Thanks, Mariano. And by the way, before I continue, I just wanted to recognize Geronimo de Guzman also submitted a couple of questions. Geronimo, I think we've answered your questions on Resilience Lab, but if not, please feel free to resubmit. We have the next question from Eugenia Caballero from JP Morgan, and she asks, what's the level of cash we feel comfortable operating? Again, back to you, Mariano.
Marcelo
Perfect. Thanks, Eugenia, for the question. First, we ended June with cash and equivalents plus short-term investments in our balance sheet of a total of $222 million with no material, short-term debt, with a very healthy net leverage ratio. So we are very confident with that figure. To operate in our markets, in the 20 markets, we estimate that between $60 and $80 million in cash is more than enough to run the business from a working capital perspective.
Operator
Okay. Well, since you touched on working capital, Mariano, it's actually perfect timing because the next question is from Ed Goldman Sachs, if I may, one more. Could you please give us more color on your work in capital dynamics? Big consumption in suppliers in the first quarter and from all lines in the second quarter. Should we expect it to be net in the full year? Perfect.
Marcelo
Well, first, I would like to clarify that if we compare last year with 2022, with 2023, the first half, we have different dynamics going on. because both figures are comparing. One, the 2022 with December 2021 numbers. This year is comparing with December 22 figures. So what happened last year is that we were increasing our cash flow because we were comparing to December 21 when the business was still normalizing coming out of the pandemic. So the first half of last year activity was much higher than prior year end, and that is why we saw the increase in cash flow in 2022. So significant increases in sales, they generate more working capital. So in 2023, what we are seeing is that we are still generating more sales And also, we advanced some payments to suppliers in June 2023 that allowed us to lock in better prices from some ingredients and better manage our gross margin that you can see in our gross margin results. But at the same time, consumed a bit more cash than normal in the period as well. For the rest of the year and with more activity, what we will see is an increase in cash flow for the second half of the year that will more than compensate from an operational cash flow perspective the decrease that you saw in the first half of this year.
Operator
Great. The next questions come from Ulises Agote at J.P. Morgan. As I mentioned, he had a couple of questions that I think we've already answered. So he says, hola a todos. Congrats on the results. Thanks for the space for the questions. And the third question he has is focus on remodeling remains. What's the trend for sales lists on the remodeled restaurants? And I'll give that one to you, Marcelo. Excellent.
Luis Raganato
Thank you, Ulises, for the question. Yes, we said that we are planning to modernize to the EOTF format approximately 250 restaurants this year. We are doing this because we are experiencing a very good impact on these investments in terms of the sales lifts that they generate. Since the very beginning when we started with this initiative four or five years ago in the south part of the region we saw that every single restaurant that was converted to EOTF had a sales lift of mid to high single digits when compared with the other restaurants in the market. So we continue to experience those kind of figures, for example, in countries like Mexico, where we still have a lot of room to deploy the EOTF format. And we are very pleased with this because this will be a huge source of growth going forward because we still have approximately 50% of our restaurant base to be converted, to be modernized and converted to EOTF. So we will have that boost in sales coming from those investments, coming from those restaurants, which is very good to sustain the kind of results we are delivering in recent quarters.
Operator
One is related to profitability margin, but the second one has to do with target share price. Christopher, we're not going to comment on target shares. I think that's something you can get from the sales side. With respect to your other question, what do we expect in terms of profitability margins to be in the future with the opening of the new restaurants? And I'll give that one to you, Mariano.
Marcelo
Perfect. And thanks, Chris, for the question. In terms of general margin outlook, our plan is clear and we are delivering. We remain focused on driving top line with sustainable volume growth in all channels to deliver EBITDA growth in US dollars with a healthy margin profile. And we are delivering that in this quarter with a more than 20% increase in our EBITDA in dollar terms. And you can see the results in second quarter figures. We are seeing improvements in all restaurant level expense items as percentage of sales, with the exception of royalties. In terms of openings, we are seeing a very good ROI on the openings. As Marcelo mentioned, we are opening mainly freestandings and we are seeing very attractive ROI on those openings.
Operator
Great. Thanks Mariano. And we have another one here from Gladys Vélez-Caicedo from Morgan Stanley. Her question is, will your expansion strategy or operations be impacted in Argentina with the impending change in leadership towards the end of the year? That one's for you Marcelo.
Luis Raganato
Okay, thank you Gladys for the question. Last Sunday there were primary presidential elections in Argentina, but there is still at least one more round of elections in October. And it would be inappropriate, I think, to speculate on the outcome, especially because there are three different candidates within three percentage points in terms of the votes that they received in the primary. So I think that anything can happen in Argentina and we cannot speculate around that. But having said that, it's important to notice that the business itself remains very strong in Argentina. even these days with a system of comparable sales still growing well above inflation. In fact, our business in Argentina is operating with one of the highest levels of guest traffic in the region. And we continue to execute our strategy in the market to shield our market share, which is very high in the country, and to continue to produce excellent results, like it was the case in Argentina for the recent quarters. It's important to mention that this kind of volatility in Argentina is not new. I've been in the business for more than 30 years and a big part of those years I spent my professional life in Argentina. We've been dealing with these kind of situations for many years and I think that we had the right knowledge and the right tools to make the best initiatives that we are executing in terms of generating the best possible results in Argentina.
Operator
Great. Thanks, Marcelo. And we actually don't have any more questions in the queue, so we've reached the end of the Q&A session today. Thank you once again, all of you, for your interest in Arcos Dorados and for joining today's webcast. We look forward to speaking with you again in the middle of November on our third quarter 2023 earnings webcast. Until then, stay safe and have a great day.
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