Arcos Dorados Holdings Inc.

Good morning, everyone, and thank you for joining our first quarter 2025 earnings webcast. With us today are Marcelo Rabach, our Chief Executive Officer, Luis Saganato, our Chief Operating Officer, and Mariana 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, ir.arcosdorados.com. To better follow the presentation, please note that you can set your view to full screen on the webcast platform. Additionally, you can submit your questions at any time during the presentation using the Q&A function on the bottom of the screen. After we conclude our opening remarks, we will answer your questions. 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 acceptable 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 today's earnings press release and conference call presentation, as well as the unaudited financial statements filed today with the SEC on Form 6K. I will now turn the call over to our CEO, Marcelo Rabach. Thank you, Dan.

Good morning, everyone, and thank you for joining us. On our last earnings call, we said we expected the first quarter of 2025 to be the low point of the year. That outlook still holds. Operating performance improved sequentially during the first quarter, with the best results coming in March. Importantly, the strongest month of the year so far has been April. We remain uniquely positioned within Latin America's QSR industry, given the strength of our brand, the success of our strategy, the geographic diversification of our operating footprint, and the numerous competitive advantages of our business model. These strengths are among the reasons we believe ARCO Dorados will best navigate the relatively volatile and challenging market conditions we have seen so far this year. Let's get into the details of our results and talk about the quarter's operating context. Total revenue reached $1.1 billion, about equal to last year. By focusing on the factors we control, we gain market share versus the prior year quarter, and we were able to offset three important headwinds. A lower QSR industry guest volumes in the period, a calendar comparisons with lead day and holy week in last year's results, and the strong depreciation of our three main currencies in the last 12 months. Importantly, constant currency revenue remained solid, built on 11.1% higher system-wide comparable sales, which was in line with blended inflation for the period. First quarter consolidated adjusted EBITDA was $91.3 million, down versus last year due mainly to weaker local currencies and margin pressure in Brazil. This was partially offset by stronger performance in Zlat, where Argentina and Chile drove better US dollar results for the division. Our strategy is about providing guests with an omnichannel experience, allowing them to choose when, where, and how they enjoy their favorite McDonald's menu items. As a result, Even as consumers pulled back on eating out of home during the quarter, off-premise channels remained resilient, generating about 43% of total system-wide sales in the quarter. Digital sales rose 6.3%, thanks to almost 19 million monthly average mobile app users. Digital channels accounted for almost 60% of system-wide sales in the first quarter, with notable sales strength in loyalty, mobile order and pay, on delivery, and self-order kiosks. The loyalty program had 18.8 million registered members and was available in five markets as of the end of the first quarter. Arco Dorados offers the region's most diverse set of sales channels and most modernized restaurant base, with 68% of restaurants already converted to the EOTF format. This is why our results have continued to outshine the competition, no matter the operating context. I will now turn it over to Luis. for a look at the first quarter sales performance in each division.

Thanks Marcelo and good morning everyone. Brazil's total revenue in constant currency grew 5.5% in the first quarter. In addition to a tough comparison after several years of strong growth, Brazil's restaurant sector also faced a relatively soft operating environment with a reduction of out-of-home dining. On the other hand, according to third party research, McDonald's brand preference increased during the quarter and value share reached a new record for the trailing 12 month period through March, accounting for almost 47% of the country's QSR industry sales. Almost 70% of system wide sales were generated by digital channels. supported by sponsorships of the Big Brother Brazil reality TV show and the Lollapalooza music festival. These marketing activities increased guest engagement with the brand and drove amplified awareness of the Meumeque loyalty program. Menu innovation in the quarter included new limited-time only flavors of the McChicken sandwich, a reheat of the popular McFish sandwich, a promotional platform focused on weekdays, and a few new dessert flavors to delight guests. Nolet's total revenue was flattish in constant currency, but declined in U.S. dollars mainly due to the depreciation of the Mexican peso. Comparable sales were positive in Mexico, which is impressive considering the comparison with Leap Day and how impactful Holy Week is in that country. This was offset mainly by lower comparable sales in Panama and Costa Rica. Guests in NOLAD adopted mobile order and pay in increasing numbers and own delivery achieved remarkable growth in the first quarter. Digital campaigns were key drivers of downloads and customer engagement. These included the Appniversary campaign that celebrated the anniversary of our mobile app in the region. Nolet's marketing activities aimed at staying close to the consumer in a challenging macroeconomic environment by focusing on value platforms across markets. Puerto Rico launched a bold breakfast campaign, Las Mañanas Son de McDonald's, that successfully showcased the brand's iconic breakfast menu. NOLAD also brought food news through core extensions, and several markets introduced new flavors to their dessert menus as well. SLAT's comp sales rose 38.7% in the first quarter, or more than 10% excluding Argentina. Argentina rebounded strongly versus last year results, which were significantly impacted by government measures to stabilize the economy. Uruguay, Venezuela, Aruba, and Curacao also contributed strongly to ComSell's performance in the quarter. Digital channels in SLAD rose by about 33% in US dollars, which was the main driver for the growth we generated at the consolidated level. Digital sales penetration for the division was about 60%, with Argentina and Uruguay both reaching 70% digital sales penetration in the quarter. Identified sales grew more than 50% year over year, and now represents about 26% of SLAT's system-wide sales. We expect this to grow with the recent launch of loyalty in both Argentina and Colombia, which have seen promising early results. Similar to Brazil and NOLAD, the anniversary campaign and Lollapalooza sponsorship contributed to loyalty program adoption, as well as to growth of own delivery and mobile order and pay on the company's mobile app. Most of SLAT celebrated core favorites with a Big Mac extension campaign to boost brand favoritism among guests. Additionally, several markets supported the premium burger and dessert segments with compelling new flavors. Mariano, over to you.